May 01, 2015
On April 16, 2015, almost 2 years after it announced guidance was needed, the Equal Employment Opportunity Commission (EEOC) released proposed regulations covering wellness programs that involve disability-related inquiries or medical examinations. The proposed wellness program regulations apply to health standard-based wellness programs, which can be either participatory or outcome based. The release follows several EEOC enforcement actions against employers alleging that wellness programs sponsored by those employers violated the Americans with Disabilities Act (ADA), despite compliance with 2013 regulations issued jointly by the Department of Labor (DOL), the Department of the Treasury (Treasury), and the Department of Health and Human Services (HHS) permitting such programs under the Employee Retirement Income Security Act (ERISA) and the Affordable Care Act (ACA). The proposed regulations are somewhat consistent with existing DOL guidance on employer-sponsored wellness programs; however, the EEOC requested comments on multiple topics that could significantly alter the regulatory requirements (i.e., whether additional protections are necessary for low-income individuals).
The EEOC takes issue with health standard-based wellness programs with incentives and rewards because the incentive or reward may be so valuable that eligible individuals are economically coerced into participating. Thus, the programs violate the ADA requirement that the program be voluntary. The EEOC’s proposed regulations provide that a wellness program will be considered voluntary if it meets the following requirements:
The EEOC’s proposed regulations diverge from the current DOL/Treasury/HHS regulations in several ways:
What this means to you – Proposed regulations are better for employers than EEOC enforcement actions in the absence of guidance. Given the wide-range of comments requested, the final regulations could be significantly different than what the EEOC has proposed. Employers should review all current wellness programs in light of the proposed EEOC regulations and consider submitting comment letters if the proposed EEOC regulations require significant changes to their programs.