6740a8a3-39c5-4954-94ff-92487200f1d1The Equal Employment Opportunity Commission (EEOC) recently announced its final ruling on how employer-sponsored wellness programs are to operate in light of the Americans with Disabilities Act (ADA), the Affordable Care Act (ACA), and the Genetic Information Nondiscrimination Act (GINA).

Here’s what you need to know

Wellness programs are legal because they’re voluntary.

Since wellness programs are voluntary, it’s perfectly okay for employers to set certain monetary rewards–and even penalties–in exchange for participation in the programs, which often include the collection of health and medical data.

Because the ADA prohibits employers from asking questions about health or disability, the ruling clarifies that voluntary wellness programs are one circumstances in which it’s allowed. Employers are also now permitted to solicit health information from a worker’s spouse.

Opponents of the ruling argue that by setting the reward/penalty limit so high (more on that later), the EEOC has created a situation where employees might feel coerced to participate and, consequently, provide information about their health that they might not otherwise.

The ADA “safe harbor” clause does not apply.

The EEOC also ruled that “safe harbor” provisions in the ADA do not apply to wellness programs. This issue arose from a lawsuit where an employer used this clause to justify charging a nonparticipating worker the full costs for health care. Per the EEOC, you can’t do that.

More and more wellness programs are asking employees to complete health risk assessments and take medical tests, such as those for high blood pressure, diabetes, or cholesterol. Some opponents of wellness programs suggested allowing an exemption to these measures if a worker provided a doctor’s note saying they were under medical care. The EEOC said no.

Privacy is crucial.

The EEOC did respond to concerns about privacy and discrimination by issuing some guidelines about how data can be gathered and shared. For example, employers are required to disclose any entities, like the third party administrator who runs the wellness program, who might have access to their medical data.

This data must also be collected and shared in an aggregate form, where it’s unlikely that anyone viewing it could ascertain the identity of individual employees. Additionally, wellness programs can’t collect information merely to have it. It must be used to help employees improve their health or customize their wellness program.

Per the EEOC, these rules will ensure that “wellness programs actually promote good health and are not just used to collect or sell sensitive medical information about employees and family members or to impermissibly shift health insurance costs to them.”

Employers are given limited permission to access individual medical data only in specific situations, like when expediting the payment of medical claims to facilitate treatment.


The limit is 30 percent.

Over half of businesses that have wellness programs offer some sort of financial reward or penalty to encourage participation. These could be anything from small gift cards to discounts on health plan premiums. Since employees who don’t participate don’t get any perks, this could also be considered a penalty.

Per the new EEOC ruling, the total dollar amount of any incentives offered can’t be more than 30 percent of the cost for single-only coverage offered by the employer. Since that coverage averages $6,000 per year, that amounts to $1,800 in benefits. If the employee’s spouse is also covered, the amount would double.

Another development was that smokers who acknowledge their habit can face penalties of up to half the cost of their single coverage. However, if medical testing is used to determine whether or not an employee smokes, the penalty is limited to the 30 percent set forth under the ruling.

The new rules go into effect next year.

The new rules for workplace wellness programs established by the EEOC go into effect January 1, 2017. If you need help implementing a wellness program of your own, or if you want help ensuring your existing program complies, just let us know!