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The New EEOC Rule on Employer Wellness Programs

The New EEOC Rule on Employer Wellness Programs
wellness

Understanding the new guidelines and how implementing a great wellness program can improve company culture.

Many employers offer some type of wellness program to their employees as a way to improve employee health and reduce healthcare spending. Wellness programs can be called many different things, including “weight loss challenges” or “healthy employee programs.” Recently, the EEOC issued a new final rule on Employer Wellness programs that impacts the American with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA).

These new rules are discussed in more detail below, and are relevant for all employers that either currently offer or are considering offering these types of programs in the future. They will become effective for the first full plan year beginning on or after January 1, 2017.

What is a Wellness Program?

A wellness program can take many forms and may go by many different names. Generally, the term wellness program means programs or activities intended to improve employee health, and reduce overall healthcare costs.

Some wellness programs either do not provide a reward, or do not require an individual to satisfy a standard related to a health factor to achieve the reward (participatory wellness programs), while other wellness programs require an individual to achieve a standard related to a health factor to receive an award (health-contingent wellness programs).

Wellness programs may be offered only to employees that participate in a group health plan, or they may be offered to all employees, regardless of group health plan participation.

What are the new regulations?

There are 2 new rules, each of which provide clarification under the ADA and GINA as to how plans should run. Additionally, both rules help address a primary employee concern regarding the use of their private health information.

The new ADA rule states that wellness programs that are part of a group health plan that require health information from participants may only offer incentives up to 30% of the total cost of self-only coverage. 

The new GINA rule states that the value of the maximum incentive attributable to a spouse’s participation may not exceed 30% of the total cost of self-only coverage, which is the same coverage allowed for the employee. It also states that no incentives are allowed in exchange for the current or past health status information on children, and no incentives are allowed in exchange for family medical history for any member of an employee’s family.

When does this new law take effect?

The first day of your plan year after January 1, 2017, or on January 1, 2017 if your plan follows a calendar year.

What should we be doing now before this takes effect?

Analyze
Employers that have not done so already should analyze their wellness programs to determine if they are a group health plan. As noted above, most wellness programs provide some type of medical care and therefore fall within the definition of a group health plan.  Wellness programs can be included in an employer’s “wrap plan” in order to comply with many of the ERISA and Affordable Care Act requirements.

Communicate
The EEOC will be releasing a specific bulletin that you will be required to provide employees – but communication stretches beyond that! Employers should have open dialogue about why joining the wellness or health plans is important, and what the end goal of the programs are. Employees should know that the information is being used to help make them healthier, and not being sold or used for purposes beyond the wellness program.

 Plan
A strong broker partner is key to navigating the increasingly complex healthcare laws, and these new regulations are no exception! Employers with existing health and wellness plans should review them in depth with their brokers to ensure that they meet all final regulations. Screenings, incentives, and questionnaires should be structured in compliance with the new regulations.

Should I start a wellness program?

If having less stressed, healthier, and more engaged employees and a shared company culture that values well-being is important to you, a wellness program may be a good fit for your business and prove successful. An office of happy, healthy employees is a beautiful thing—and a great wellness program can create just that.

Workplace wellness programs are often deployed to help make a positive impact on employee health and productivity, but this impact is best realized if employers and wellness providers are successful at creating a culture of health. Since a culture of health is not a “one-size-fits-all” solution and may differ from workplace to workplace, it’s important to work with a seasoned provider who can ensure that ample consideration is given and recommendations are provided regarding the key items that can impact culture, from choosing the right incentives to utilizing communication to including disease management and coaching.

Should I seek help?

Absolutely! These rules are complex, and there could be financial consequences if you are found to be in violation of them. Equally as important is the impact to engagement, and how the new rulings affect how our teams work.

livingHR’s team of compensation, compliance, total rewards, and cultural experts are here to help! We understand the potential total impact and can help review current structures, re-design your wellness programs, create clear communication plans for the employees, and train managers and employees on the new regulations.

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