As of Jan. 1, the Equal Employment Opportunity Commission removed its former regulations that permitted employers to offer incentives to their employees for participating in wellness programs.
In 2016, the commission issued regulations relating to wellness programs and how participation could be considered “voluntary” under federal law. One requirement limited wellness program incentives to 30% of the cost of health coverage to qualify as a “voluntary” employee health program.
AARP sued, arguing that EEOC offering employees discounts of up to 30% of their health coverage also meant imposing penalties of up to 30% for employees who choose not to participate.
In late 2017, a federal court agreed with AARP and ordered the 30% incentive rule vacated by Jan. 1, 2019. EEOC waited until last November to formerly announce that it would rescind the incentive rules ordered vacated by the court.
“In doing so, the EEOC left employers back in the quandary they were in before,” says attorney Patricia A. Pryor of the Jackson Lewis law firm. “Neither the law, nor the remaining regulations, expressly prohibit (or permit) incentives.”
The remaining rules provide that an employee health program is voluntary if it:
- Does not require employees to participate.
- Does not deny coverage for non-participation or limit benefits for employees who do not participate.
- Does not take any adverse employment action against employees.
- Provides employees with a notice that is understandable by them.
Does offering an incentive, any incentive, violate these rules? EEOC plans to issue new regulations by this June. Expect the courts to jump in again because they had only just begun analyzing this issue when the earlier regulations were issued.
