Within the coming year, the Equal Employment Opportunity Commission (EEOC) is expected to issue revised proposed rules regarding permissible wellness incentives under the Americans with Disabilities Act (ADA).
On May 17, 2016, the EEOC issued the final rule detailing how the ADA would apply to employer-sponsored wellness programs and was adopted on January 1, 2017. This final rule restricted the incentive amount that an employee who answered health related questions or undergoes medical examinations as part of a wellness program can receive. The incentive restriction was to be no more than 30% of the total cost of an employee-only health plan coverage.
This rule was revoked effective January 1, 2019, based on a civil action lawsuit raised by American Association of Retired Persons (AARP) against the EEOC, removing any restrictions to an employer sponsored wellness incentives. The cause of the lawsuit and ultimate decision to vacate the rule was a result of inconsistencies in the use of the term voluntary in the final rule. The AARP deemed that the ruling was against ADA regulations until the term voluntary was clearly defined as it applied to the EEOC’s final rule.
The EEOC has indicated that they have reevaluated wellness incentive regulations and will propose new incentive rules in 2020. The proposed rules will provide guidance to employers on the permissible incentive limits for an employer sponsored wellness plan, primarily as it applies to the voluntary nature of the wellness requirements. Until this time, employers are encouraged to evaluate their wellness programs and continue to look for additional updates from the EEOC in 2020. Cowden will also provide updates on the new EEOC incentive rules once available and can assist in the evaluation of your employer sponsored wellness plan to ensure it remains within compliance.
Contact your Cowden representative for more information on this or other compliance issues.