EEOC rescinds rules on wellness incentive limits for now

Effective January 1, 2019, the U.S. Equal Employment Opportunity Commission (EEOC) has officially rescinded its regulations that allowed employers to offer wellness incentives of up to 30 percent of the cost of employee-only health coverage. As we previously reported a year ago, a federal district court determined that the EEOC didn’t have fact-based evidence to support its stance that a wellness incentive was “voluntary” and therefore permitted under the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA) as long as the cost of the incentive (or penalty) was limited to 30 percent of the cost of employee-only health coverage. The court gave the EEOC a year to figure out a new approach, but said the existing rule had to go away no matter what on January 1, 2019. The EEOC therefore pulled the incentive rules from its ADA and GINA regulations (83 Fed Reg 65296, Dec. 20, 2018).
 
Tips: Unfortunately, the EEOC has said it won’t even have a proposal for a revised standard until June 2019. That leaves employers with no clear guidance on the amount of any financial incentives they can offer to encourage employees and their family members to participate in employer-sponsored wellness programs. Sticking with the old 30 percent standard is now highly risky under the ADA and GINA. Consider reducing or eliminating financial incentives for wellness programs. Until we have clarity from the EEOC, if you offer a financial incentive, consider alternative options for individuals who have difficulty with the requirements (or are even merely uncomfortable with them). For more information, see our Legal Guide, Workplace Wellness Plans.