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By: Matt Ingold

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July 7th, 2016

How has the EEOC Ruling Impacted Wellness Incentives?

Wellness | Healthcare Compliance | Compliance & Auditing

wellness plan complianceIn May of 2016, the EEOC published final versions of rules pertaining to employer wellness plan compliance. The updates addressed:

  1. Incentive caps for wellness plans that require employees to disclose biometric information (BMI)
  2. Incentive caps for wellness plans that require BMI from employee’s spouses who participate in voluntary plans

So, why the change? The intent of the regulation was to provide employers with a common standard for which to measure the compliance of their wellness plans. Prior to the regulatory update, it was possible for employer wellness programs to be in compliance with the ACA, yet violating the ADA.

The regulation goes into effect in 2017 of the renewal month of employer-sponsored coverage (plans renewing in July do not need to be in compliance until July of 2017).

So what do you need to know?

How the EEOC Update Impacts Wellness Incentives

  1. If the wellness plan requires the use of BMI for administrative purposes, the maximum incentive an employer can offer an employee is 30% of the total cost of the lowest cost employee-only premium.
  2. Employers may extend the same 30% incentive to spouses when requiring BMI for plan administration.
  3. Employers that offer incentives for smoking cessation programs can offer incentives up to 50% of the lowest cost employee-only coverage as long as the program does not test employees for nicotine, and only asks them whether or not they smoke.
  4. For employees that cannot participate in employer wellness plans due to a disability, employers must offer a reasonable accommodation. This must be communicated up front in writing at the time the plan is issued.
  5. Participation MUST BE VOLUNTARY! An employer cannot require an employee to participate in a wellness plan in order to be eligible to participate in the plan.

Bottom line: If you have a wellness program that is collecting BMI (yes this even includes heart rates) and offering incentives (to include t-shirts, prizes, in-kind gifts) they need to be reviewed for compliance with recent EEOC update. In-kind gifts need to be assigned a reasonable monetary value, as they must be factored into the 30% incentive limit.

About Matt Ingold

Matt serves as Benetech's Director of Business Development. He helps employers reduce the cost of personnel management, and discover where improved talent management can give their business a competitive advantage.

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