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EEOC provides clarity on wellness program incentives

May 18, 2016

As we've previously discussed on our blog here, here and here, employee wellness programs are very much on the Equal Employment Opportunity Commission's (EEOC) radar. Both the Americans with Disabilities Act (ADA) and Genetic Information Nondiscrimination Act (GINA) generally prohibit employers from collecting information about the health of employees and their family members. There is an exception, however, for when employers provide health or genetic services as part of a voluntary wellness program. The big question recently has been: when an employer attempts to incentivize employees to participate in a wellness program, how much of an incentive can an employer provide without jeopardizing the "voluntary" nature of the program?

By publishing a pair of final rules on Monday, May 16, 2016, the EEOC has answered that question definitively. The use of incentives, whether in the form of a reward or a penalty, will not make a program involuntary if the maximum allowable incentive available under the program does not exceed 30 percent of the total cost of self-only coverage. Likewise, the value of the maximum incentive attributable to a spouse's participation in a wellness program is also limited to 30 percent of the total cost of self-only coverage.

In contrast, no incentives are permissible in exchange for health information relating to employees' children or for certain specific information (e.g. genetic tests) relating to an employee or his/her family members.

The new rules also reinforce the EEOC's commitment to ensuring that employee health information is protected from misuse. Among other things, employers must notify employees who participate in wellness programs as to how their information will be collected, used and shared. Employers must also ensure that all information collected remains confidential.

The new final rules go into effect on January 1, 2017 and can be accessed in their totality here (final ADA rules) and here (final GINA rules).

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