On April 20, 2015, the EEOC issued a notice of proposed revisions to its regulations under the Americans with Disabilities Act concerning employer wellness programs. The new regulations will not become effective until after the notice period ends on June 19, 2015, and a final rule is published. In the meantime, here’s what employers should know about the EEOC’s proposed rules for wellness programs:

  1. Wellness programs must be reasonably designed to promote health and prevent disease. The proposed regulations explained that a program satisfies this standard “if it has a reasonable chance of improving the health of, or preventing disease in, participating employees, and it is not overly burdensome, is not a subterfuge for violating the ADA or other laws prohibiting employment discrimination, and is not highly suspect in the method chosen to promote health or prevent disease.”
  2. Wellness programs must be voluntary. An employer may not require employees to participate in a wellness program, nor may an employer deny health insurance coverage or other benefits to employees for refusing to participate, except as part of an authorized, limited incentive that complies with the proposed regulations.
  3. Wellness incentives must be limited. The proposed regulations state that an incentive, whether in the form of a reward or a penalty, so long as the “maximum allowable incentive available under the program . . . does not exceed 30 percent of the total cost of employee-only coverage.” For example, if the total cost of coverage paid by both the employer and employee for self-only coverage is $5,000, the maximum incentive for an employee under that plan must be $1,500.
  4. Medical information must be kept confidential. Medical information obtained through a wellness program must be maintained as confidential, except as authorized by the ADA or as may be necessary to administer the health plan.
  5. Employers must offer reasonable accommodations for wellness programs. Absent undue hardship, employers are required to provide reasonable accommodations to enable disabled employees to enjoy equal benefits and privileges of employment, including participation in wellness programs. This includes reasonable accommodations that may be necessary to enable employees with disabilities to earn whatever financial incentive an employer wellness program offers.

Takeaway: Employers who offer wellness programs should review the EEOC’s notice of proposed rulemaking and provide comments on it before June 19, 2015, if they wish to do so. Because the proposed rules will likely be similar, if not identical, to the final rule that eventually will take effect, employers should also review their wellness programs to determine whether any changes may be necessary.