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Wellness Program Incentives Conflict with ADA and EEOC

Voluntary wellness programs, as part of group health plans, are growing in popularity. According to the Kaiser Family Foundation, 94% of large employers and 63% of smaller ones offer programs. Many employers offer a financial incentive to participate, either a penalty or reward. Therefore, the Americans with Disabilities Act (ADA) and the Equal Employment Opportunity Commission (EEOC) regulations come into play when someone with a disability cannot participate or succeed in the program.

 

On March 20, 2015, the EEOC sent proposed new rules to address the interaction between Title I of the ADA and financial incentives to the Office of Management and Budget for clearance. If approved, the proposed rule will have a 60-day public notice and comment period before becoming law.

 

EEOC Challenges to Financial Incentives

The Affordable Care Act (ACA) encourages financial incentives for wellness programs. In fact, studies by the Employee Benefit Research Institute show that financial incentives are a crucial factor for engaging unhealthy workers in wellness programs at work.

 

However, the EEOC recently filed three lawsuits alleging that financial penalties negate the voluntary aspect of wellness plan participation, and therefore, violate the ADA.

 

The EEOC and Congress have been debating the acceptability of “aggressive” financial incentives in wellness programs. Recently, a bill was proposed that would limit the EEOC’s enforcement activity on this matter.


On March 24, 2015, the House Education and Workforce Committee held a hearing on a proposed bill (H.R. 1189, the Preserving Employee Wellness Programs Act), that would protect ACA-compliant wellness programs by limiting EEOC enforcement activity toward these plans.

 

Tips for Employers

Employment attorney Leslie E. Silverman, former vice chair of the EEOC, offered the following advice to employers at the SHRM Law and Legislative Conference in March:

  • Whenever possible, make the financial incentive a reward instead of a penalty.
  • Make it clear to employees that you never have access to an individual's medical information, health risk assessments, or biometric/diagnostic test results gained through wellness programs.
  • Never threaten, discipline, or terminate employees for non-participation. Do not differentiate between participants and non-participants on employer-provided health insurance eligibility.

 

Don’t Get Discouraged

Wellness programs are good for the employee, the employer, and society as a whole. Do not let regulations discourage you from offering this incentive. Let us take a look at your plans to be sure they are compliant or let us help you take advantage of this great work-place benefit.

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