EEOC Proposes New Wellness Incentive Rules

The EEOC proposed new wellness incentive rules that provide insight into the EEOC’s views of wellness incentives and how they may fit into wellness program design in the future.

February 23, 2021

February 23, 2021 Update: On February 12, 2021, the EEOC withdrew these proposed regulations for review under a regulatory freeze. We recommend that plan sponsors treat their wellness incentives as if the current rules still apply and consider delaying any substantial changes in incentive design. We will update our members on any new developments.


In January 2021, the Equal Employment Opportunity Commission (EEOC) released new proposed wellness incentive regulations under the Americans with Disabilities Act (ADA) and Genetic Information Nondiscrimination Act (GINA). With the recent appointment of a new Chair, the EEOC may modify these proposed regulations in the coming weeks or months. Nevertheless, they provide insight into the EEOC’s views of wellness incentives and how they may fit into wellness program design in the future. The chart below summarizes the provisions most relevant to employer-sponsored wellness programs.

Wellness Incentives: Proposed ADA & GINA Rules

Program Type Examples Incentive Limit

Participatory

  • Incentive does not depend on results/health outcome
  • Can be available to all employees and family members
  • Cannot require genetic information

Asks for health information: Incentive to complete health risk assessment 

De minimis (e.g., water bottle or $5 gift card)

 

Does not ask for health information: Incentive to attend health education classes

No limit 

Health-contingent

  • Incentive for health activity or outcome
  • Available only to group health plan participants
  • Must make use of aggregate data to improve health
  • Must include risk management element
  • Can be available to all employees and family members
  • Cannot require genetic information

 
  • Incentive to exercise or achieve certain cholesterol level
  • Incentive to participate in disease management when individual voluntarily provides genetic information

≤ 30% of cost of coverage (employer + employee share)

Incentive to complete tobacco cessation program

≤ 50% of cost of coverage (employer + employee share)

What’s New in These Proposed Regulations?

These proposed regulations, if finalized, would apply along with existing wellness program rules under HIPAA and the Affordable Care Act (ACA). The primary differences from the existing rules are as follows:

  • Unlike the prior 30% of cost of coverage limit under HIPAA and the ACA, any incentive for providing health information can be no more than de minimis. Examples include water bottles and gift cards for small amounts.
  • Any incentives to provide health information for employees who are not enrolled in the employer’s group health plan must be de minimis.
  • Higher incentives (30% of cost of coverage, 50% for tobacco cessation) can only be available to employees and dependents who participate in the employer-sponsored group health plan. These incentives generally must be incorporated into the group health plan, and the plan must use aggregate data from the wellness program to improve health.
  • Unlike the prior GINA rules, the proposed regulations allow for incentives based on the cost of family coverage if family members are allowed to participate in the wellness program.

Upcoming Webinar

We will provide a more detailed discussion of these proposed regulations in our next regulatory and compliance webinar on February 23, 2021 at 12:00PM ET. Members can register here.

If you have questions, comments, or concerns about these or other regulatory and compliance issues, please contact us.

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We provide this material for informational purposes only; it is not a substitute for legal advice.

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