Tuesday, May 17, 2016

EEOC’s final rules on employer wellness programs provides clear path for employers

Yesterday, the EEOC published its long-awaited rules that describe how the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act apply to wellness programs offered by employers that request health information from employees and their spouses. Both rules take effect July 18, 2017.

The EEOC has made the following documents available:

What do employers need to know about these rules? The two biggest takeaways are: (1) wellness programs are voluntary (and therefore do not violate the ADA or GINA) as long as an employers’ incentives or discounts don’t exceed more than 30 percent of the cost of an employee’s individual “self-only” health coverage; (2) employers still have obligations under both laws to keep confidential employee medical and genetic information provided through a wellness program.

Given the surging cost of health insurance and the massive burden those costs place on employers and employees, it is relief that the EEOC is leaving intact these beneficial programs popularized by the Affordable Care Act. Moreover, the EEOC’s 30 percent hard cap is certainly more palatable than a fuzzy “reasonableness” standard that begs for litigation and uncertainty. While both employers and employees can quibble over whether 30% is too low, too high, or just right, I’d rather have this Goldilocks debate over a number we can see than a different debate over a fuzzy standard that we cannot.