On August 22, 2017, the United States District Court for the District of Columbia held that the U.S. Equal Employment Opportunity Commission (EEOC) failed to provide a reasoned explanation for its decision to adopt 30 percent incentive levels for employer-sponsored wellness programs under both the Americans with Disabilities Act (ADA) rules and Genetic Information Nondiscrimination Act (GINA) rules.
The court declined to vacate the EEOC's rules because of the significant disruptive effect it would have. However, the court remanded the rules to the EEOC for reconsideration.
Based on the recent court decision to require the EEOC to reconsider its wellness program rules, does this mean that the EEOC rules no longer apply to employer wellness programs? No. For now, the current EEOC rules apply to employer wellness programs. However, employers should stay informed on the status of the EEOC's reconsideration of the wellness program rules so that employers can change their wellness programs' design, if necessary, to comply with new EEOC rules.
According to UBA’s free special report, “How Employers Use Wellness Programs,” 67.7 percent of employers who offer wellness programs have incentives built into the program, an increase of 8.5 percent from four years ago. Incentives are the most prevalent in the Central U.S. (76.1 percent), among employers with 500 to 999 employees (83.2 percent), and in the finance, insurance, and real estate industries (74.7 percent). The West offers the fewest incentives, with only 48.3 percent of their plans having rewards.
Across all employers, slightly more (45.4 percent) prefer wellness incentives in the form of cash toward premiums, 401(k)s, flexible spending accounts (FSAs), etc., versus health club dues and gift cards (40 percent). But among larger employers (500 to 1,000+ employees) cash incentives are more heavily preferred (63.2 percent) over gift certificates and health club dues (33.7 percent). Conversely, smaller employers (1 to 99 employees) prefer health club-related incentives (nearly 40 percent) versus cash (25 percent).
Download our free (no form!) special report, “How Employers Use Wellness Programs,” for more information on regional, industry and group size based trends surrounding prevalence of wellness programs, carrier vs. independent providers, and wellness program components.
For comprehensive information on designing wellness programs that create lasting change, download UBA’s whitepaper: “Wellness Programs — Good for You & Good for Your Organization”.
To understand legal requirements for wellness programs, request UBA’s ACA Advisor, “Understanding Wellness Programs and Their Legal Requirements,” which reviews the five most critical questions that wellness program sponsors should ask and work through to determine the obligations of their wellness program under the ACA, HIPAA, ADA, GINA, and ERISA, as well as considerations for wellness programs that involve tobacco use in any way.
By Danielle Capilla, Chief Compliance Officer at United Benefit Advisors