Insight to Action

Benefits & Healthcare Update: EEOC Proposes Wellness Regulations, Adding Regulatory Limits to Program Design

22 April 2015

On April 20, 2015, the Equal Employment Opportunity Commission (EEOC) published proposed regulations for keeping employer-maintained wellness programs compliant with the Americans with Disabilities Act (ADA). This is welcome guidance after litigation brought by the EEOC sparked discourse over wellness programs last year. However, the proposed regulations introduce more limits to wellness program designs and added burden, to administering wellness programs.

Many of the changes in the proposed regulations reiterate requirements already present under HIPAA regulation. There are some new significant requirements under the EEOC's proposed regulations, among them being:

1. Wellness programs may not require employee participation as a condition of employment, eligibility under a group health plan, or eligibility for a particular benefit package within a group health plan (e.g., a benefit specifically designed for people who do or do not participate in the wellness program).

2. If the wellness program is part of a group health plan, employers must provide notices clearly stating what medical information is being collected, how the information will be used, who will receive the information, the restrictions on its disclosure, and the methods the employer and plan use to prevent the disclosure of medical information.

3. Wellness programs may include incentives as large as 30% of the total cost of employee-only coverage. The proposed regulations do not address whether the program may have as large an incentive based on family coverage when dependents and spouses are included in the incentive program.

4. Medical information may only be provided to the employer in aggregate terms that do not disclose the identity of specific individuals, except as needed to administer the health plan.

The proposed regulations are not final, and the EEOC may make significant changes to the guidance before finalization. Regardless, employers and group health plans should re-examine their wellness programs in light of the proposed regulations. Cammack Health will continue to monitor for any further guidance from the EEOC.

The proposed regulation is available for download here: https://www.federalregister.gov/articles/2015/04/20/2015-08827/amendments-to-regulations-under-the-americans-with-disabilities-act

If you have any questions regarding compliance matters with wellness programs, please contact Ed Doherty at 646-839-8251 or via email at EDoherty@cammackhealth.com.