Are Incentives for Participating in Workplace Wellness Programs in Peril?

Are Incentives for Participating in Workplace Wellness Programs in Peril?

01/19/2018

 

The data on workplace wellness programs is in, and they’re a hit with nine out of 10 employers, who now rely on them to address challenges ranging from productivity and absenteeism to health-related costs. However, a new ruling from a federal district court in Washington, D.C., may mandate changes to these programs as early as next January.

 

As it stands now, the U.S. Equal Employment Opportunity Commission (EEOC)’s rules on employer-sponsored wellness programs allow employers to reimburse employees for up to 30 percent of their cost of health insurance as an incentive for participating in workplace wellness programs. However, in October 2016, the American Association of Retired Persons (AARP) sued the EEOC, objecting to two of its regulations and filing a motion to block them. The AARP argued that the regulations are discriminatory for financially penalizing employees who refuse to provide personal medical and genetic information.

 

Last August, U.S. District Court Judge John D. Bates called the EEOC regulations “arbitrary and capricious.” He ruled that the agency had not adequately demonstrated why workplace wellness program incentives do not violate the Americans with Disabilities Act’s requirement that any disclosure of disability-related information must be voluntary. The court directed the EEOC to amend the rules while leaving them in place. In response, the EEOC proposed waiting a minimum of three years before proposing its new rules.

 

Nevertheless, Bates amended his order last month and granted the AARP’s motion to vacate the EEOC’s current wellness regulations as of Jan. 1, 2019. According to the ruling, “Because the Court issued its summary judgment decision in August 2017, EEOC will thus have had a total of over sixteen months to come up with interim or new permanent rules by the time the vacatur takes place. The Court will also hold EEOC to its intended deadline of August 2018 for the issuance of a notice of proposed rulemaking.”

 

While the EEOC could still appeal, Dara Smith, the AARP’s lead attorney in the case, says, “Making the rules ineffective two years sooner than the agency proposed is a major victory for workers and AARP. It means two fewer years of coercive penalties imposed on employees who exercise their civil right to keep private health-related information private in the workplace.”

 

Alternatively, the American Benefits Council, a lobbying group, may “try to convince their legislative allies, like Virginia Foxx (R-NC5), to push her Preserving Employee Wellness Programs Act,” according to an op-ed on EmployeeBenefitsAdviser.org. “However, this bill is very controversial and is opposed by her constituents in both parties, largely because it expands the reach of wellness programs to include genetic testing. Consequently, Rep. Foxx may get cold feet about persevering.”

 

In the meantime, the impact of wellness programs continues to ripple across workplaces. Three-quarters of employers now offer wellness programs as a means of improving worker health, in contrast to the quarter of employers who primarily offer them because they improve ROI on healthcare costs, according to findings from the International Foundation of Employee Benefit Plans’ Workplace Wellness Trends 2017 Survey Report. These popular programs dovetail with other employer programs that address employees’ mind-body concerns, including financial wellness and mental health programs.

 

Read our blog post about how today’s workplace wellness offerings emphasize overall employee health and wellbeing.