EEOC’s New Wellness Program Rules a Bust

Posted September 8, 2017 by Megan DiMartino in Uncategorized | 0 comments

In May 2016, the Equal Employment Opportunity Commission (EEOC) released its final rule with regard to employer wellness programs. The rules went into effect January 1, 2017, and state that the incentive (or penalty) for participating (or not participating) in a wellness program may not exceed 30% of a group health plan. Basically, these new rules allow employers to offer a discount on insurance costs to those participating or increase costs to those not participating.

These regulations were intended to better streamline the American with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA) with the Affordable Care Act (ACA), but both groups are finding them inconsistent with the “voluntary” requirements. The American Association of Retired Persons (AARP) is also arguing (and filed suit in October 2016) that these requirements are in no way “voluntary” as employees who do not participate and can’t afford to pay the 30% penalty would be forced to disclose their protected information, when otherwise, they wouldn’t have to do so. They also argue that the EEOC never provided an adequate explanation for the changes.

The parties took the question to court to be reviewed under Chevron deference, which is when a court is to defer to interpretations of statutes by those involved, unless such interpretations are unreasonable. Since neither the ADA nor GINA had a clear definition of “voluntary” participation, the court deferred to the EEOC’s interpretation of the term, but found that they also failed to make a clear understanding. The District Court for the District of Columbia found that these new rules were ill-reasoned and could not be accepted, so the EEOC is to review and revise the new regulations or they can move forward with appealing the decision.

As of now, your company can continue on as is with your wellness programs for 2017. As for the future, it is unclear at this point. The EEOC hasn’t made it clear yet as to which approach they are taking, whether it be to appeal the decision or to rectify the new rules and regulations, so be cautious of your wellness program offerings for next year.

For questions, concerns or additional assistance with your Wellness Plans, please contact your Account Executive or Account Manager.

May 2016 | EEOC Wellness Rules Update

For more information contact The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.
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