EEOC Guidance on Wellness Programs – Helpful or More Confusing?

Lyndsey R. Barnett

The ACA changed the rules on employers offering wellness programs a few years back. A detailed discussion of these rules is found here. If these ACA rules aren’t complicated enough, the EEOC is proposing to change the rules even further. While I find it frustrating that yet another governmental agency finds the need to weigh-in on wellness programs, the EEOC issuing guidance is a better approach than it continuing to file lawsuits against employers.

Last week, the EEOC released proposed regulations that clarify that an ACA-compliant wellness program does not violate the Americans with Disabilities Act by forcing employees to disclose medical information or agree to undergo medical testing to receive a reward or avoid a penalty. While that clarification is great news for employers with wellness programs, the proposed regulations do not completely mesh with the ACA guidelines and in several instances are more restrictive. For example, the ACA wellness regulations increase the reward limit to 50% of the cost of self-only coverage if the increase is tied to a program intended to help smokers kick the habit. The EEOC did NOT incorporate this increase into its regulations, so a smoking cessation program that requires employees take a medical exam (e.g. a cotinine test) would not comply if the total wellness reward exceeds 30%.

These regulations are only proposed, so at this point, no action is necessary for employers to comply with the regulations. A day after the EEOC issues its guidance, the DOL, HHS and Treasury Department jointly issued an FAQ confirming that just because a wellness program complies with the ACA requirements does not mean that it is deemed to comply with any other federal laws, including the Americans with Disabilities Act. This FAQ may be a signal that the EEOC does not agree in all places with the other Departments. Hopefully, before the regulations are finalized, the EEOC will make life easier and parallel its requirements to the ACA regulations, but that may just be wishful thinking. Stay tuned for updates as the EEOC works to finalize the regulations.