EEOC Issues Notices of Proposed Rulemaking on Wellness Program Rules

Some U.S. employers offer health wellness programs to keep their workforces healthy and to try to save on the cost of providing health benefits. However, wellness program practices have come under scrutiny, especially as it relates to incentives provided for participation in them.

In another attempt at defining the rules for such programs, the Equal Employment Opportunity Commission (EEOC) has forwarded to the Federal Register its Notices of Proposed Rulemakings (NPRMs) on wellness programs under the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA). The NPRMs have been cleared by the Office of Management and Budget and sent to the Federal Register for publication.

Previously approved by the EEOC, the proposed rules address what level of incentives employers may lawfully offer to encourage employee participation in wellness programs that require disclosure of medical information, without violating the ADA or GINA.

The NPRMs respond to a decision by the U.S. District Court for the District of Columbia that vacated a portion of the EEOC’s previous ADA and GINA regulations. Although the Health Insurance Portability and Accountability Act of 1996 (HIPAA), as amended by the Patient Protection and Affordable Care Act (ACA), allows employers to offer incentives up to 30% of the total cost of health insurance to encourage participation in certain types of wellness programs, the ADA requires that employee participation in a wellness program that includes medical questions and exams be “voluntary.”

Because the ADA and GINA do not define “voluntary,” the NPRMs propose that, to comply with the ADA and GINA, employers may offer no more than a de minimis incentive to encourage participation in wellness programs, with the exception of certain wellness programs that would be permitted to offer the maximum allowed incentive under the 2013 HIPAA regulations.

Prior to 2016, some employers that established wellness programs under the rules then in place found themselves faced with discrimination lawsuits filed by the EEOC. After the Health, Education, Labor and Pensions (HELP) Committee urged clarification of the wellness program rules, the EEOC issued final rules in 2016.

That October, the AARP filed a lawsuit alleging that the final wellness program rules were arbitrary, capricious, an abuse of discretion and not in accordance with law. The AARP asked that the rules be invalidated.

In August 2017, a federal court ruled in favor of the AARP. However, saying it is “far from clear that it would be possible to restore the status quo ante if the rules were vacated; rather, it may well end up punishing those firms—and employees—who acted in reliance on the rules,” it did not vacate the rules, instead remanding them to the EEOC for reform and/or elucidation. In 2018, the EEOC issued new final rules which removed incentive sections of its previous final rules about wellness programs under the ADA and GINA.

Unofficial versions of the latest NPRMs are available at https://www.eeoc.gov/regulations/wellness-rulemaking.  After the Federal Register publishes the proposed rules, the public will have 60 calendar days to submit comments for those comments to be considered by the EEOC. Members of the public may submit electronic comments about the proposed rules at www.regulations.gov in the rulemaking dockets RIN 3046-AB10 and RIN 3046-AB11.