Rules/Regs Update: Workplace Wellness Programs

The Lead june 2016 - Lifetime Benefit Solutions

Rules/Regs Update: Workplace Wellness Programs

New Rules and Regs for insurance brokers workplace wellness programsIn May, the Equal Employment Opportunity Commission (EEOC) released final regulations relating to workplace wellness programs. According to the regulations, an employer may offer an incentive, such as a reward or a penalty, to an employee whose spouse receives health services provided by the employer – included as part of a wellness program – and where the spouse provides information about his/her current or past health status.

Do's & Don'ts

In addition, a wellness program that asks employees (1) to answer disability-related questions about their health conditions or (2) undergo medical examinations or biometric screening for the purpose of alerting them to health risks (such as having high cholesterol or elevated blood pressure) is permissible under the law in cases where a reward is provided for participating in the program. (Conversely, a penalty can be imposed for non-participation or failing to meet certain health outcomes.)

However, asking employees to provide medical information on a health risk assessment without providing any feedback about risk factors or using aggregate information to design programs or treat specific conditions is not permissible.

The rules further hold that an employer cannot require participation in these programs; may not deny an employee access to health coverage if they choose not to participate; and may not take adverse actions against employees who choose not to participate.

The EEOC imposed a new notice requirement on employers offering the above described programs, requiring employers to clearly explain what medical information will be obtained, how it will be used, who will receive it, and restrictions on its disclosure. If the employer is not already providing this information described above, then a new notice must be sent in some form.

Incentives & Penalties

One of the most important clarifications under the EEOC final regulation is the type of incentives that may be offered for participation in the wellness programs discussed above - or penalties that may be imposed for non-participation or failing to meet certain health outcomes. Specifically, the maximum allowable incentive that may be offered to employees participating in the program - and similarly the maximum allowable penalty for non-participation or failing to meet certain health outcomes - must equal 30% of the lowest-cost self-only plan offered by the employer.


The final regulations include two new confidentiality requirements providing that medical information collected through a wellness program may only be provided to an employer in aggregate terms that do not disclose and are not reasonably likely to disclose the identity of specific individuals, except as, for example, needed to administer the health plan. In addition, an employer may not require an employee to agree to the sale, exchange, sharing, transfer, or other disclosure of medical information, or to waive confidentiality protections under the law as a condition of participating in a wellness program or receiving an incentive for participating.


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