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EEOC Wellness Incentives Update: What You Need to Know for 2019

On Dec. 20, 2017, a United States district judge for the District of Columbia ordered that portions of the Equal Employment Opportunity Commission’s (EEOC’s) 2016 regulations under the Americans with Disabilities Act and the regulations under the Genetic Information Nondiscrimination Act be vacated effective Jan. 1, 2019.

The judge was dissatisfied with the EEOC’s definition of a voluntary wellness program when incentives are tied to participation. The issues debated are:

  • At what point is an incentive too large for the program to no longer be voluntary?
  • Should there be incentives tied to activities that ask about employees’ medical histories (health risk assessments) and medical exams (biometric screens)?

The EEOC had until the end of August 2018 to provide new regulations with additional justifications. However, the EEOC ultimately decided not to respond for the 2019 plan year, creating a gray area surrounding incentives maximums tied to completing medical exams and/or revealing confidential medical and family health information.

What Does This Mean for Your Wellness Program in 2019?

It’s important to keep wellness incentives to a maximum of 20 percent of the total premium amount for the lowest-cost employee-only coverage for health-contingent wellness programs. You may wish to consider the following recommendations based on risk tolerance:

  • Zero Risk

    Those who wish to have no liability should remove all incentives or penalties tied to HRA and biometric screening exams.

  • Moderate Risk

    Those who can tolerate moderate liability should keep incentives under 20 percent of the total premium amount for the lowest-cost employee-only coverage.

    • Offering employees multiple avenues to achieve the wellness incentive, other than requiring employees to complete the health risk assessment and/or biometric screening, is a safe, compliant alternative that is in line with the spirit of a wellness program.
    • For those who have a wellness incentive structure tied only to a health risk assessment and/or biometric screening, adding a disclaimer stating that, if someone is uncomfortable completing the health risk assessment or participating in the biometric screen, they can contact human resources for a standard alternative. The standard alternative does not need to be established prior to the beginning of the plan year. For additional resources, reach out to your OneDigital consultant.
  • High Risk

    Those who are comfortable assuming the most risk can maintain the current incentive amount of 30 percent. Although not recommended, legal counsel should be sought to evaluate the compliance of the health plan.

For additional information or questions about 2019 wellness program compliance requirements, contact your OneDigital consultant.

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