As reported by the Society For Human Resource Management (SHRM), proposed regulations will be issued shortly by the U.S. Equal Employment Opportunity Commission (EEOC) on the use of financial incentives in worksite wellness programs.

In recent months, the EEOC has filed three lawsuits alleging that financial penalties imposed on employees who declined to participate in their employers’ wellness programs violated the the Americans with Disabilities Act (ADA), because the incentives rendered the programs involuntary. The proposed legislation is intended to protect wellness programs that offer incentives that fall within the maximums established by the Affordable Care Act (ACA): up to 30 percent of the cost of annual health coverage; and for tobacco cessation programs, up to 50 percent of the cost of health coverage.

The lack of clear EEOC guidance regarding wellness programs has drawn significant attention. The EEOC has stated that it plans to issue proposed regulations regarding wellness programs and the types of incentives that employers could provide. Legislation has also been introduced that would coordinate the wellness program provisions found in the ACA with the ADA and the Genetic Information Nondiscrimination Act (GINA).

The submission of the Notice of Proposed Rulemaking (NPRM) to the White House Office of Management and Budget (OMB) represents the start of the regulatory process. After OMB approval, the proposed rule will be published in the Federal Register for a 60-day public notice and comment period. The NPRM cannot be made public prior to its publication in the Federal Register.

Until more clear guidance is available, employers should take note of the issues highlighted in the EEOC cases and contact their NEEBCo representative with questions.