EEOC's Proposed Rules for Employer Wellness Programs at OMB for Approval
- March 27, 2015
Last year, EmployNews reported several cases where the Equal Employment Opportunity Commission sued employers, claiming that the terms of their employee wellness programs violated the Americans with Disabilities Act and the Genetic Information Non-Discrimination Act. In these cases, the EEOC alleged that the employer had imposed excessive rewards or penalties to coerce employees to engage in certain behaviors designed to reduce group medical plan expenses.
The defendant employers denied these claims, stating that their wellness programs comply with federal law. Other employers observing these cases complained that on the one hand, they were subject to EEOC lawsuits over their wellness plans’ details, but on the other, the agency had failed to provide specific guidance over what are and are not excessive wellness plan terms. This issue attracted the attention of the Republican-led Congress, which urged the EEOC to provide clear guidance to employers with respect to acceptable wellness plan terms.
The EEOC listened to these requests, and last week approved proposed wellness plan rules by a largely bipartisan vote. The rules have been sent to the Office of Management and Budget for review before publication for notice and comment within the next several weeks.
Employers now face questions over whether the EEOC will propose restrictions on wellness plan terms that undermine the effectiveness of such plans. Wellness programs’ success depends on motivating plan participants to change behaviors to cause better health outcomes. If the EEOC excessively limits the “carrots and sticks” that such plans may impose, it runs the risk of removing incentives for employers to invest in wellness based on an inability to motivate behavioral changes. Employers and disability rights advocates are certain to take opposing views with regard to the limits of such incentives.