The U.S. Equal Employment Opportunity Commission just released proposed regulations related to wellness plans, finally lifting the veil of secrecy surrounding its actions. The EEOC regulations apply to wellness plans that include disability related inquiries or “medical exams”
The EEOC’s regulations are designed to allow employers to continue to provide financial incentives to employees, up to 30% of the plan’s total cost of employee-only coverage (i.e., both the employer and employee portions of the cost). Thus, the regulations somewhat dovetail with the existing HIPAA regulations. However, the subtle difference is that the HIPAA regulations do not impose limits on incentives, unless they are based on health status-related factors.
For example, assume a plan gives an incentive for simply completing a health risk assessment (HRA) that requires a blood draw. Under the HIPAA regulations, that incentive does not count toward the 30% limit (i.e. because the results of the HRA do not matter). Nevertheless, that incentive must be counted toward the 30% limit under the EEOC regulations because it requires a blood draw, which is considered a form of a medical exam.
Another difference relates to tobacco use. When tobacco use is a component of the incentive, the HIPAA regulations allow the incentive to go as high as 50% of the plan’s cost of providing employee only coverage. However, if the plan is going to be testing for nicotine use, the EEOC regulations will not allow that incentive (along with any other incentives that require a “medical exam” of some sort) to exceed 30% of the plan’s cost of employee only coverage.
To be considered voluntary, the EEOC regulations also prohibit an employer from denying coverage under any of its group health plans or particular benefits packages within a group health plan for non-participation, or limiting the extent of benefits for employees who do not participate in the wellness plans. This restriction may be an issue for some employers who have required employees to go into a different health care plan, with different benefits, as a result of not participating in a wellness plan, rather than simply limiting the differences to financial incentives, such as higher deductibles and co-pays.