EEOC Finalizes Wellness Program Regulations

The Equal Employment Opportunity Commission (“EEOC”) recently issued final regulations on the application of the Americans with Disabilities Act (“ADA”) and the Genetic Information Nondiscrimination Act (“GINA”) to employer wellness programs.

ADA Regulations.  The final ADA regulations are largely consistent with the proposed regulations (see our prior newsletter EEOC Adds Complexity to Wellness Programs with Proposed Regulations).  However, the final regulations clarify:

• Amount of Reward.  Like the proposed regulations, the final regulations permit an employer to offer incentives up to a maximum of 30% of the total cost of self-only coverage (including both employer and employee costs) to encourage employees to participate in a covered wellness program.  The final regulations clarify how this limit is calculated:
  • If participation in the wellness program is limited to employees enrolled in a particular group health plan, the maximum reward is 30% of the cost of self-only coverage under that plan;
  • If an employer’s group health plan provides only one coverage option, and participation in the wellness program is open to employees regardless of whether they are enrolled in the plan, the maximum reward is 30% of the cost of self-only coverage under the employer’s plan;
  • If an employer’s group health plan provides multiple coverage options and participation in the wellness program is open to employees regardless of whether they are enrolled in a particular option, the maximum reward is 30% of the cost of the lowest cost self-only coverage under the employer’s plan; and
  • If an employer does not offer a group health plan, the maximum reward is 30% of the cost of self-only coverage under the second lowest cost Silver Plan on the Exchange in the employer’s principal place of business.

• New Notice Requirements.  The regulations also require employers to provide employees with a notice that clearly explains (i) what medical information will be collected under the wellness program, (ii) how the information will be used, (iii) who will receive the information, (iv) the restrictions on disclosure, and (v) how improper disclosures will be prevented.  The EEOC plans to provide a sample notice on its website later this month.

GINA Regulations.  Following a framework similar to the ADA regulations, the GINA regulations allow an employer to offer an incentive that does not exceed 30% of the total cost of self-only coverage when an employee’s spouse provides his or her non-genetic health information through a health risk assessment or medical examination.

• As a result, both an employee and his or her spouse can earn a 30% reward that collectively totals 60% of the cost of self-only coverage.
• However, incentives are not permitted for a spouse to provide his or her own genetic information (e.g., the spouse's family medical history) or for health information about an employee’s children.

Effective Date.  The new limit on incentives and the notice requirements under the final regulations are effective for plan years beginning on or after January 1, 2017.  According to the EEOC, all other provisions of the regulations simply clarify existing obligations and apply both before and after publication of the final regulations.

Contact Information.  For more information from Mazursky Constantine, please contact Don Mazursky (404.888.8840), Kelly Meyers (404.888.8838), Angela Roberts (404.888.8822), or Alex Smith (404.888.8839).  For additional information from VCG Consultants, please contact Leslie Schneider (770.863.3617).

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