Work it Out Blog

Implementing a Wellness Plan? More Regulations Ahead!

May 20, 2015 by Jill C. McQueen

Employers now have another set of regulations to contend with when implementing their wellness plans.  Last month, the EEOC published proposed regulations to clarify the interplay between the Americans with Disabilities Act (ADA) and the Affordable Care Act (ACA) regulations, which were implemented on January 1, 2014.  The competing regulations are not entirely consistent, and differ in three important ways.

     1. The reward that you can provide under “participatory” wellness plans is different under the ACA regulations and the proposed EEOC regulations.  The ACA regulations separate wellness plans into “participatory” plans and “health contingent” wellness plans.  Under a participatory plan, the employee only needs to “participate” to gain the reward, without actually improving health. 

For example, a paid gym membership would qualify as a participatory plan, as long as the employee does not have to provide proof of health improvement.  Merely having the gym membership is enough to receive the award.  Moreover, there is no cap to the reward.  However, under the ACA, the health contingent plans require finishing an activity or achievement with a specific goal to receive the award. And, the reward cannot exceed 30% of the total cost of health insurance from both employee and employer contributions combined.

In contrast, the EEOC’s proposed regulations implement a 30% cap on rewards for participatory plans, if those plans require employees to complete a health questionnaire with disability related questions, or take a medical examination or test.

     2. The EEOC regulations limit the reward in situations with employee-only health coverage.  The EEOC provides that, “if the total cost of coverage paid by both the employer and employee for self-only coverage is $5,000, the maximum incentive for an employee under that plan is $1,500.”  There is no provision under the EEOC regulations for rewards when the employee has family coverage.  In contrast, the ACA regulations also provide a 30% award for family health coverage if the employee and spouse may participate in the wellness plan.

     3. The EEOC requires a much more detailed notice provision for the wellness plan and incentives.  This notice requirement focuses upon

  •     what medical information may be obtained,
  •     who may receive it,
  •     how it may be used, and
  •     what measures the employer will implement to maintain privacy.

The EEOC regulations are currently “proposed” regulations, open to comment from the public.  The comment period ends on June 19, 2015.  Expect some additional changes and clarifications when the EEOC’s final regulations are published, which is likely by the end of the year.  Please contact your Day Ketterer employment law attorney with any questions about your wellness plan. 

The content of this blog is for informational purposes only and is not intended as legal advice for any purpose. This blog is not intended to present an exhaustive summary of all applicable laws, or to take the place of legal advice.  If you have any questions regarding the law, please contact us for assistance.