United States: New EEOC Regulations Provide Roadmap For Wellness Programs

For large employers, the quest to reduce the cost of medical benefits relies in part on helping employees get healthier. Enter the "wellness program," where employers offer incentives to employees and their families to be more proactive about their health in various ways, such as more exercise, quitting smoking, diagnosing high cholesterol and high blood pressure, and evaluating the risk of future health problems.

Although wellness programs are well-intentioned, they raise issues under various federal laws, including:

  • The Health Insurance Portability and Accountability Act (HIPAA), which prohibits discrimination in group health plans on the basis of adverse health factors, such as high cholesterol, high blood pressure, medical history, and genetic information;
  • The Americans with Disabilities Act (ADA), which requires reasonable accommodations for disabled individuals to have equal access to benefits and prohibits employers from making disability-related inquiries to employees or requiring employees to take medical examinations—but allows voluntary medical examinations and collection of medical histories as part of an employee health program; and
  • The Genetic Information Nondiscrimination Act (GINA), which prohibits requesting genetic information from employees and their spouses, except as part of a voluntary program that is designed to promote health or prevent disease.

The requirements to comply with HIPAA's prohibition against discrimination rules have been pretty clear since 2006; and the Affordable Care Act further liberalized the requirements, to encourage innovative programs that inspire healthy habits and proactive disease prevention. But as the Departments of Treasury, Labor, and Health and Human Services (HHS) published prescriptive regulations and other guidance, the Equal Employment Opportunity Commission (EEOC) continued to warn employers that programs designed to comply with HIPAA and the ACA might still violate the ADA and/or GINA. The EEOC's principal concern has been that if incentives to participate in a medical examination or provide medical history are too substantial, the program effectively will not be voluntary—which would violate the ADA and/or GINA.

Initially, the EEOC expressed its views through informal statements and guidance in its enforcement manual. In 2014, however, the EEOC brought lawsuits challenging three employers' wellness programs. The suits signaled to employers that merely complying with the Treasury, Labor, and HHS guidance under HIPAA and the ACA might not be enough: there was a risk that any incentive to participate in a medical examination or provide medical history might make the program involuntary, in violation of the ADA and/or GINA.

On May 16, 2016, the EEOC issued final rules on the Regulations Under the Americans With Disabilities Act and Genetic Information Nondiscrimination Act as well as Q&As on Employer Wellness Programs and Title I of the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act that appear to put the "voluntariness" uncertainty to rest. With a few exceptions, the final rules generally mirror proposed rules issued by the EEOC last year. Together with the regulations and other guidance issued by Treasury, Labor, and HHS, the final regulations appear to provide a clear roadmap for designing wellness programs that comply with federal law. Here are five highlights from the EEOC's final regulations:

  1. Wellness programs must be reasonably designed to promote health or prevent disease. This means that a wellness program may not impose an "overly burdensome" time commitment; involve unreasonably intrusive procedures; be a subterfuge for unlawful discrimination under the ADA, GINA, or other anti-bias laws; or require employees to incur significant costs for medical exams. And the information collected must be used to address at least a subset of conditions identified. Unlike the HIPAA rules, the ADA's "reasonably designed" standard applies not only to health-contingent and outcome-based programs, but also to participatory programs.
  2. Participation in wellness programs must be "voluntary." This means that incentives may not exceed a specified threshold (the 30% rule described in #3, below); health benefits may not be conditioned on participating in the wellness program; and an employer may not retaliate against anyone who does not participate in the wellness program.

    Also, the sponsoring employer must provide a written notice to employees explaining what medical information will be obtained, how it will be used, who will receive it, and restrictions on disclosure. This notice may be included in other materials describing the wellness program. The EEOC says it will issue sample language in June.
  3. Incentives for participation may not exceed 30% of the cost of self-only coverage. Under the final regulations, the total incentives—discounts on health care premiums, cash rewards, in-kind prizes like Fitbits, gift cards, and gym memberships, and anything else combined—for an employee to participate in a wellness program—may not exceed 30% of the cost of self-only coverage (the employer's share plus the employee's share). This limit is lower than the maximum amount permitted under the HIPAA rules.

    A wellness program may also offer an additional incentive of up to 30% of the total cost of self-only coverage for a spouse to provide information about his or her current or past health status (subject to not exceeding a limit under the HIPAA rules). But a wellness program may not provide an incentive to provide health information about an employee's child.

    Special Rule for Tobacco Use. The 30% limit described above may be increased to 50% of the cost of self-only coverage to answer questions about tobacco use. However, a wellness program may not provide any additional incentive (above the 30% limit described above) to submit to medical tests—e.g., a procedure that tests for the presence of nicotine or tobacco.

    Which plan is relevant? In general, the coverage used to determine the maximum incentive should be the lowest cost coverage that the employer offers; but if the wellness program is offered only to employees enrolled in a particular plan, the employer should use the coverage in which the employee is actually enrolled. If the employer does not offer a health plan, the maximum incentive should be based on the cost to a 40-year old non-smoker for self-only coverage under the second lowest-cost Silver Plan available on public exchange for the employer's home state.
  4. Confidentiality is paramount. Employers and wellness program providers must protect the confidentiality of employee medical information and must not use employee medical information for any purpose that would violate the ADA. The new regulations expand on these principles with two new requirements:

    1. Information collected through a wellness program may be presented to an employer only in aggregate form—in a way that is not reasonably likely to identify specific individuals, unless necessary to administer the program; and
    2. An employer generally may not require an employee to agree to any transfer or disclosure of medical information or to waive confidentiality protections under the ADA.
    The EEOC has also issued some optional "best practices" for ensuring confidentiality. These practices include training, use of encryption, and the creation of "firewalls" to prevent transmission of medical information to anyone responsible for making decisions related to employment.
  5. Inside the plan, outside the plan. . . it doesn't matter. Until now, there was some debate over whether the rules are different for wellness programs offered under a plan than for programs outside of the plan. For purposes of ADA and GINA, that distinction no longer matters. The rules described above apply either way.

Effective Date

The new notice requirement and incentive rules apply for plan years starting on and after January 1, 2017. The EEOC states that all other provisions, such as the confidentiality requirements, are clarifications of existing obligations; so those provisions are effective immediately.

Proskauer's Perspective

After years of uncertainty, the final regulations provide welcome clarity on the requirements for wellness programs—at least under federal law. Employers should review their programs and make adjustments as necessary to comply with the new regulations. In particular, employers will need to assess the value of prizes that they offer for participating in wellness programs, to make sure they stay below the 30% cap. Also, now that the rules are more clear, employers might wish to revisit incentives in the form of premium subsidies.

New EEOC Regulations Provide Roadmap For Wellness Programs

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.