American Benefits Council
Benefits Byte

2015-066

June 22, 2015

The Benefits Byte is the American Benefits Council’s regular e-mail and online newsletter for members only, providing timely reports on legislative, regulatory and judicial developments, along with updates on the Council’s activities in support of employer-sponsored benefit plans.

The Benefits Byte is published by the American Benefits Council, based on staff reports and edited by Jason Hammersla, Council director of communications. Contact information for Council staff related to specific topics can be found at the end of each story.

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Council Comments on EEOC Proposed Regulations Governing Wellness Programs

In June 19 written comments, the Council urged the U.S. Equal Employment Opportunity Commission (EEOC) to ensure that the regulations regarding employer wellness programs are consistent with HIPAA, the Patient Protection and Affordable Care Act (PPACA) and congressional intent, to provide for consistent federal policy with respect to wellness programs.

The EEOC issued long-awaited proposed rules that amend the Americans with Disabilities Act (ADA) regulations and interpretive guidance relating to employer wellness programs on April 20. Along with the proposed rules, the EEOC also issued a questions-and-answers document and a fact sheet for small businesses. (See the April 16 Benefits Byte.)

The proposed rules provide 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. The ADA restricts employers from obtaining medical information from employees by generally prohibiting them from making disability-related inquiries or requiring medical examinations. The statute includes an exception, however, for “voluntary” medical examinations or medical histories which are part of an employee health program available to employees, including workplace wellness programs.

As explained in the Supplementary Information section of the proposed regulations, previous EEOC guidance stated that a wellness program is “voluntary” if an employer neither requires participation by employees nor penalizes employees who do not participate. However, neither the statute nor the EEOC’s existing regulations or other guidance addressed the extent to which incentives may affect the voluntary nature of a wellness program.

The Council’s comment letter outlines how HIPAA already provides strong regulatory protections for employees participating in wellness programs. The specific comments to the proposed rule and how it is inconsistent with current federal policy note that:

  • When an employee and spouse (or dependent) are enrolled in other than self-only coverage, and both are eligible to participate in the wellness program, the maximum incentive limit of the ADA should be the same as that which applies for HIPAA – in other words, 30 percent of the cost of the other-than-self-only coverage in which the employee and spouse (or dependent) are enrolled. 
  • Imposition of an “affordability” standard with any incentive limitation is discouraged, as it is ill-suited to wellness programs and contrary to the goal of consistent policy.
  • All tobacco-related programs should be allowed to use the higher 50 percent incentive limitation permitted by HIPAA, regardless of whether the program uses a biometric screen or diagnostic test.
  • As permitted by existing federal law, employers should be able to encourage wellness program participation by allowing access to certain employer-sponsored coverage only to those participating in the employer’s wellness program (sometimes referred to as a “gated” wellness plan design).
  • Clarification is needed regarding the application of any incentive limitation to stand-alone wellness programs. Employers who sponsor stand-alone wellness programs should also be able to use meaningful incentives to encourage participation.
  • The proposed new notice requirement is unnecessary and should not be required, as sufficient notice is already required under HIPAA privacy rules. Prior, written and knowing confirmation of voluntary participation in a wellness program should also not be required.
  • With regard to wellness programs that are not part of a group health plan, entering into a contract with a wellness provider in which the provider maintains protected health data should be sufficient to ensure that any confidentiality requirement is satisfied.
  • The bona fide benefit plan safe harbor should be available in the context of wellness programs.
  • Final rulemaking should not take effect for a minimum of 12 months after issuance, given that decisions regarding benefit design are made well in advance of the beginning of a plan year. The EEOC should also make clear that employers are not at risk of enforcement action based upon this rulemaking project until the applicability date of any final rulemaking has passed.
  • If the EEOC issues future guidance on the applicability of the Genetic Information Non-Discrimination Act (GINA) to wellness programs, a safe harbor related to the sponsoring of spousal Health Reimbursement Arrangements (HRAs) by employers is needed.

The Council held a webinar on the proposed regulations on May 12; click here to request a recording. As the Council testified in hearings before the U.S. Senate Health, Education, Labor and Pensions (HELP) Committee and the House of Representatives Education and Workforce Subcommittee, the lack of clear guidance from the EEOC regarding the application of the ADA and GINA to employer-sponsored wellness programs contributed to the sense of legal and regulatory uncertainty for such programs, particularly as the EEOC began to pursue litigation against wellness plan sponsors in late 2014.

For more information, contact Katy Spangler, senior vice president, health policy, or Kathryn Wilber, senior counsel, health policy, at (202) 289-6700.



The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council's members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.

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