New Rules Put Limits on Employee Wellness Programs

Last month the U.S. Equal Employment Opportunity Commission issued rules limiting the incentives and penalties employers can offer for participation in wellness programs that collect health data on employees (such as health risk assessment surveys and biometric screenings). These limits are to ensure that penalties for opting-out of wellness programs are not so big that participation is effectively mandatory.

The new limit has been set at 30% of the cost of “employee only” coverage under the health plan. This limit is for each plan participant, meaning an employer could offer the maximum incentive separately for an employee and their spouse to participate in the wellness program.

The Affordable Care Act had previously limited incentives to 30% of the cost of coverage at whatever tier the employee was enrolled. This meant that employee with family coverage could be subject to much larger penalties. The new rule limits this to 30% of the cost of “employee only” coverage.

In a previous post we explained how the “cost of coverage” is defined for wellness incentives.

These rules will go into effect beginning 2017.

Links:

EEOC Issues New Rules for Wellness Programs (The Wall Street Journal, May 16, 2016)

CWA Health Care Reform Update: Limits on Wellness Programs (CWA Health Care & Retirement Security Blog, October 23, 2013)