New final rules on employee wellness programs allow employers to offer discounts on health premiums if workers and their spouses answer questions about their health or take a physical examination.
The Equal Employment Opportunity Commission's final regulations issued Monday clarify what had been seen as conflicting federal rules regarding whether financial incentives given for workplace wellness programs amounted to penalties for those who did not participate.
The new rules, which go into effect Jan. 1, allow companies to offer a maximum incentive of up to 30% of the total cost of self-only coverage. The limit applies individually to employees and their spouses, so a couple could receive 60% of the cost of self-only coverage if they both participate.
Workplace wellness programs that offer discounted health insurance premiums have been a popular trend that's only grown through encouragement by the Affordable Care Act.
The EEOC, however, has argued that the Americans with Disabilities Act prohibits an employer from denying access to a particular health plan because an employee does not answer disability-related questions or undergo medical examinations.
In 2014, the EEOC filed lawsuits against three companies on the grounds that their wellness programs violated both the ADA and the Genetic Information Nondiscrimination Act by imposing surcharges or raising premiums if employees failed to undergo biometric screening or complete a health risk assessment.
"The EEOC received comments on both rules from a broad array of stakeholders and considered them carefully in developing this final rule," EEOC Chair Jenny Yang said. "These rules make clear that the ADA and GINA provide important safeguards to employees to protect against discrimination."
Despite their popularity among employers, wellness programs have drawn scrutiny by some who say they don't lead to better health outcomes or generate significant cost savings.
A 2013 RAND Corp. study found workplace wellness programs were only cost-effective when they focused on helping employees manage chronic health conditions.
In a blog published on Monday, Al Lewis, a workplace wellness critic called the final EEOC rules “draconian,” saying it represented a boon for a wellness program industry that has been estimated at $6 billion.
“In a deep dark recess of today's Federal Register, large corporations just quietly received permission to 'play doctor' with their employees,” Lewis wrote. “Their hope is to claw back a big chunk of the insurance premiums paid on behalf of employees who refuse to submit to these programs, or who can't lose weight.”
Brian Marcotte, president and CEO of National Business Group on Health, stated he had hoped the new rules would have been more flexible but acknowledged they did offer clarity for companies looking to avoid violating DAD or GINA laws.
“All in all, the rules are very much in line with what the EEOC proposed last year,” Marcotte stated. “The rules do what the EEOC was asked to do—clarify for employers where their wellness plan incentives stand with respect to ADA and GINA compliance.”
Steve Wojcik, vice president of public policy at the National Business Group on Health in Washington, told Business Insurance that he had been hoped the rules would allow the use of “gated” benefit plans, which allow employees to enroll in the richest plan if they comply with a biometric screening or health risk assessment. But the final rules rejected that approach.
“As long as the default plan is acceptable … why not say that if you are willing to do a biometric screening or health assessment, you can have a more generous plan option?” he said.
