In a victory for business groups, the U.S. Equal Employment Opportunity Commission said last week that employers can continue to use substantial financial penalties and rewards to nudge employees to participate in workplace wellness programs.
But the EEOC also proposed some safeguards for employees, including limits on the size of financial incentives, confidentiality of their medical information and prohibitions against firing workers who decline to participate in wellness programs or denying them access to the company health plan.
Financial incentives can range as high as 30% of the cost of premiums for employee-only coverage, the commission said. The proposed regulations are now open for public comment for 60 days.
Businesses say programs requiring workers to complete a health-risk assessment help them reduce their employee health benefit costs and improve their workers' health. But researchers say there is no strong evidence that such programs have improved health or reduced medical costs for most workers.
A 2013 study of a major St. Louis health system found its wellness program was associated with a sharp drop in hospitalization. Yet increased outpatient costs erased those savings.
The wellness regulations have been lobbied hard by business groups pressing for more leeway and by advocates for people with disabilities seeking limitations.
The Business Roundtable warned the Obama administration last year that the EEOC's pursuit of discrimination claims related to wellness programs was having a chilling effect on efforts to control health costs. But disability rights groups have sought strict limits on financial incentives.
The 30% standard for financial carrots and sticks was set in the Affordable Care Act.
If the total premium paid by the employer and employee for individual coverage is $5,000, rewards or penalties for participating in a wellness program under that plan cannot exceed $1,500.
Karen Pollitz of the Kaiser Family Foundation said the EEOC changed its position and now says, “It is OK to penalize people as long as the financial penalties or incentives … are within these limits.”
EEOC chairwoman Jenny Yang said in a written statement that “medical inquiries and exams that are part of an employee health program must be voluntary.”
At the same time, “allowing incentives to encourage participation in wellness programs” is permitted by federal law. —Associated Press
