Professional Service Agreement

Wellness Programs in 2019

January 09, 2019

Employers with wellness programs will recall there has been some uncertainty over the past few years as to what level of incentive or penalty is too high for the wellness program to still be considered "voluntary." This threshold is an important point in the design of wellness programs because an employer’s ability to make disability-related inquiries, require medical examinations (such as biometric screenings), or to collect information about an employee’s family members/spouse is limited to wellness programs that are "voluntary" under the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA). In 2016, the Equal Employment Opportunity Commission (EEOC) issued Final Rules explaining that an incentive or penalty of up to 30% would be considered “voluntary” thus limiting incentives for participation or penalties imposed for failure to participate to 30% of the total cost for self only coverage of the health plan.
In 2017, a federal court remanded the Final Rule to the EEOC and eventually ordered that the incentive/penalty ceiling of 30% be vacated effective January 1, 2019. In December 2018, the EEOC issued a Final Rule removing the incentive section, which means employers are no longer able to rely on the EEOC’s “30% rule” for purposes of wellness plan compliance.