Employee Wellness Programs: Recent Regulatory Developments All Companies Need To Know About

Written by Joshua F. Silk and Todd N. Robinson of Hall Booth Smith, P.C. for the 2015 Fall/Winter issue of USLAW Magazine.

Workplace wellness programs have become commonplace in corporate America, a development in part due to incentives in the Affordable Care Act (“ACA”). The influx of such programs has not gone without notice, however, as the Equal Employment Opportunity Commission (“EEOC”) has recently challenged wellness programs in an effort to ensure compliance with the Americans with Disabilities Act (“ADA”), and the Genetic Information Nondiscrimination Act of 2008 (“GINA”). In EEOC v. Honeywell International1, the EEOC lost a motion for a preliminary injunction where it alleged the company’s wellness program violated Title VII of the Civil Rights Act (“Title VII”), and the ADA. Given the high burden of the preliminary injunction standard, the U.S. District Court for the District of Minnesota ruled that the EEOC failed to demonstrate that Honeywell employees would face irreparable harm, or that employees’ right to privacy in their protected health information (“PHI”) was compromised.

In response to this defeat, on April 16, 2015, the EEOC drafted new wellness regulations to address the concerns identified in the Honeywell case and others.2 These amendments relate specifically to wellness programs. The proposed rule provides new guidance on the extent to which employers may use incentives to encourage employees to participate in wellness programs that include disability-related inquiries and/or medical examinations, and the manner in which such programs may be offered. The time for public notice and comment on the proposed rule began on April 20, 2015, and closed on June 19, 2015.

The proposed rule has five main components employers should consider in creating or revising wellness programs. The proposed rule essentially requires that a wellness program: (1) be reasonably designed to promote health or prevent disease; (2) be voluntary; (3) not have incentives totaling more than 30 percent of the total cost of employee-only coverage; (4) provide adequate notice to employees; and (5) ensure confidentiality of PHI….READ MORE.