Published in Health Care

EEOC scraps two wellness incentive rules, adding uncertainty for employers

BY Sunday, February 03, 2019 08:48pm

A decision out of Washington, D.C. at the end of last year provides further uncertainty as to how far employers can go with incentives to encourage employees to participate in wellness programs.

The U.S. Equal Employment Opportunity Commission in mid-December decided to scrap two rules about wellness incentives.

Amy Ritsema COURTESY PHOTO

The EEOC first established the rules in May 2016 to amend existing regulations under the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act. Under those changes, it must be strictly voluntary for employees to answer any disability inquiries, submit to medical exams or respond to requests for health information. The EEOC set a 30-percent cap on wellness participation incentives, based on the cost of an individual employee’s health coverage.

The main issue remains the notion of what constitutes a “voluntary” program and at what point do incentives for employee health screenings and participation in the program become involuntary.

The EEOC’s decision to rescind the rules follows an August 2017 federal court ruling in a lawsuit brought by the American Association of Retired Persons that the 30-percent cap was arbitrary. A judge ruled the agency failed to justify how it arrived at that threshold and ordered it to better explain the cap or come up with revised regulations by Jan. 1. The EEOC, saying it could not get new rules ready until 2021, instead opted to scrap them.

The EEOC got involved in the issue “to determine what’s voluntary” and “at what point do incentives from an employer flip the switch on whether that program is truly voluntary and whether employees feel like they will lose out if they didn’t participate,” said attorney Jennifer Sabourin, a principal and leader of the labor and employment practice at Miller, Canfield, Paddock and Stone PLC.

Following the EEOC decision, employers “now enter a period of uncertainty with regard to the collection of employee health information for the purposes of voluntary health plans under the EEOC’s wellness regulations,” Sabourin and colleague Samantha Kopacz wrote in a recent Miller Canfield newsletter on the decision. “It is unclear at this time if the EEOC will be implementing new rules to replace those vacated at the direction of the federal court.”

How many employers actually bump into the incentive cap remains unknown. The attorneys wrote that most of their clients have incentives and rewards built into their wellness programs and group health coverage that range from 10 percent to 20 percent of the cost.

Even with the EEOC dropping the rules on incentives to drive participation, employers must still follow 2013 rules for offering rewards to employees who set and achieve a health goal, such as taking a health-risk assessment, walking a certain distance each day, losing weight or trying to quit smoking.

Those rules from the U.S. Department of Labor, the Internal Revenue Service and Department of Health and Human Services remain “alive and well” under the Affordable Care Act, said Kopacz, a benefits attorney at Miller Canfield. The rules require that employers offer some kind of alternative goal that people who have physical limitations can achieve and earn a reward. The ADA rules also allow an employer to offer a reward for meeting a health goal of up to 30 percent of the cost of coverage.

As far as advice for employers: Have your wellness program carefully reviewed by legal counsel to figure out your compliance with GINA and the ADA as well as determine any potential risks, Sabourin said. Companies also need to assess whether incentives built into the plan and what they save on their health premiums “is worth that potential risk.”

Given the remaining federal regulations, the key question to setting up and using incentives to drive employees to participate in a wellness program is “can everybody participate, can everybody earn that incentive, whatever that may be,” said Amy Ritsema, a co-owner at OnSite Wellness LLC, a third-party wellness vendor in Grand Rapids.

“It just comes down to alternatives,” Ritsema said. “Every program must have an alternative. If you don’t, that’s where you’re going to get into trouble.”

Read 2911 times Last modified on Monday, 04 February 2019 09:26
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