Equal Employment Opportunity Commission

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****UPDATE:  These proposed regulations were not published in the Federal Register before President Biden’s inauguration.  In accordance with the Memorandum for the Heads of Executive Departments and Agencies, issued by Chief of Staff Ronald A. Klain, the proposed regulations have been withdrawn for review by the Biden administration.****

On January 7th,…

The U.S. District Court for the District of Columbia (Judge Bates) has denied AARP’s request to block the implementation of the EEOC’s final wellness regulations pending a decision on the merits. As we have discussed previously, the regulations address the extent to which an employer may offer incentives to participate in a wellness program without violating the Americans with Disabilities Act (ADA) or the Genetic Information Nondiscrimination Act (GINA).  The final rules have taken effect as of January 1, 2017.

For large employers, the quest to reduce the cost of medical benefits relies in part on helping employees get healthier. Enter the “wellness program,” where employers offer incentives to employees and their families to be more proactive about their health in various ways, such as more exercise, quitting smoking, diagnosing high cholesterol and high blood pressure, and evaluating the risk of future health problems.

On May 29, 2013, the Departments of Health and Human Services, Labor and Treasury (the “Departments”) issued final regulations on implementing and expanding employment-based wellness programs. The rules set forth in the final regulations remain largely unchanged from the proposed rules issued on November 20, 2012. For example, as provided for in the proposed rules, the final regulations increase the maximum permissible reward under a health-contingent wellness program offered in connection with a group health plan from 20 percent to 30 percent of the cost of coverage. The final regulations also increase the maximum permissible reward to 50 percent for wellness programs designed to prevent or reduce tobacco use. http://www.proskauer.com/publications/client-alert/new-guidance-on-wellness-programs-issued/.  However, a few points and clarifications are particularly noteworthy:

Despite the clear support for employers’ continued and expansive use of wellness programs as a means of promoting health and preventing disease expressed in the Affordable Care Act and the recently-proposed rules implementing and expanding employment-based wellness programs [http://www.proskauer.com/publications/client-alert/new-guidance-on-wellness-programs-issued/], the Equal Employment Opportunity Commission (“EEOC”) has still not provided more definitive guidance on permissible…