- Still No EEOC Guidance on Permissible Wellness Program Incentives
- March 27, 2013
- Law Firm: Proskauer Rose LLP - Washington Office
Despite the clear support for employers’ continued and expansive use of wellness programs as a means of promoting health and preventing disease expressed in the Affordable Care Act and the recently-proposed rules implementing and expanding employment-based wellness programs [http://www.proskauer.com/publications/client-alert/new-guidance-on-wellness-programs-issued/], the Equal Employment Opportunity Commission (“EEOC”) has still not provided more definitive guidance on permissible incentives in the wellness program context. Guidance issued by the EEOC has provided that, for a wellness program to be permissible under the Americans with Disabilities Act (the “ADA”) and Title II of the Genetic Information Nondiscrimination Act of 2008, it must be “voluntary.” To be voluntary, an employer may not require participation nor penalize employees who do not participate.
In an informal discussion letter, dated January 18, 2013, the EEOC again declined to provide specific guidance about what level of financial incentive may be provided as a condition of participation in a wellness program before the program is rendered involuntary. The letter was written in response to an inquiry regarding health plans that provide greater benefits to employees with certain adverse health conditions. The plan described in the letter was offered to eligible employees (e.g., employees with diabetes) on a voluntary basis and waived the plan’s annual deductible if an employee met certain requirements, such as enrollment in a disease management program or adherence to a doctor’s exercise and medication recommendations. The EEOC indicated that this would be considered a wellness program. Therefore, to be permissible under the ADA, the employer could neither require participation nor penalize employees who do not participate. The EEOC noted that the plan described provided a reward for participation (i.e., waiver of the annual deductible) and that “[t]he EEOC has not taken a position on whether and to what extent a reward amounts to a requirement to participate, or whether withholding of the reward from non-participants constitutes a penalty, thus rendering the program involuntary.”
Pending further guidance from the EEOC, employers should consider (i) structuring their wellness programs to be clear that participation is voluntary and (ii) communicating any financial incentive in the form of rewards for voluntary participation (as opposed to penalties for failure to participate).