EEOC Removes Incentive Sections of Wellness Program Rules

The Equal Employment Opportunity Commission (EEOC) has issued final rules which remove incentive sections of its final rules about wellness programs under the Americans With Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA).

In May 2016, the EEOC issued two final rules that explain how Title I of the ADA and Title II of GINA apply to wellness programs offered by employers that request health information from employees and their spouses. The final ADA rule states that wellness programs that are part of a group health plan and that ask questions about employees’ health or include medical examinations may offer incentives of up to 30% of the total cost of self-only coverage. The final GINA rule says that the value of the maximum incentive attributable to a spouse’s participation may not exceed 30% of the total cost of self-only coverage, the same incentive allowed for the employee.

That October, the AARP filed a lawsuit alleging that the final wellness program rules are 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.

Upon further consideration, in January of this year, the court vacated the incentive portions of the rules. The EEOC had said new proposed rules would be issued in August, with final rules to be issued in October 2019. The EEOC also said, because of the time required for employers to come into compliance, any new final rule “likely would not be applicable until the beginning of 2021,” and it hinted that the process could take even longer as it starts to look into the substance of the issues involved and as new nominees eventually join the Commission. U.S. District Judge John D. Bates of the U.S. District Court for the District of Columbia said this is not the timeline he had in mind when he remanded the rules to the EEOC for form or clarification. “There is plenty of time for employers to develop their 2019 wellness plans with knowledge that the rules have been vacated,” he wrote in his opinion.

The EEOC’s removal of the incentive sections of the final wellness program rules is in response to the court’s decision. The new rules do not indicate whether or when the agency plans to propose new rules.