EEOC revising rules on financial incentives for wellness programs

The U.S. Equal Employment Opportunity Commission on Friday signaled that it has completed a set of rule revisions to address practical conflicts in the regulations governing the use of financial incentives in workplace wellness programs.

The EEOC voted Friday to send a Notice of Proposed Rulemaking to the federal Office of Management and Budget for clearance to submit the revisions to the Federal Register for public comment.

The proposed rule would amend provisions of Title I of the Americans with Disabilities Act that clash with provisions of the Patient Protection and Affordable Care Act regarding employers’ use of monetary rewards and penalties to motivate employees to complete wellness activities or achieve certain measurable health outcomes, the EEOC said in a statement.

With the Office of Management and Budget’s approval, the proposed rule will be added to the Federal Register for a 60-day public review and comment period.

Employers, health insurers and benefits consultants have been clamoring for the EEOC to address the disconnects between the ADA’s rules prohibiting workplace discrimination based on physical disabilities and health care reform rules implemented in 2014 that loosened restrictions on the amount of money employers can use — either in the form of health insurance cost differentials or cash rewards and penalties — to incentivize their wellness programs.

Many of the chronic diseases and other costly adverse health conditions that employers frequently design their wellness programs to address generally qualify as protected disabilities under the ADA.

Last year, the EEOC filed federal lawsuits against Morristown, New Jersey-based Honeywell International Inc. and two Wisconsin companies, claiming the companies’ wellness incentive structures unfairly penalized employees for refusing to participate in health risk assessments and biometric screenings.