The Equal Employment Opportunity Commission released a proposed rule this week on wellness programs, removing what at least one business group calls a “big cloud” that has been hovering over employers as they struggle to ensure their wellness incentive programs don’t run afoul of the EEOC.

The EEOC has come under fire in recent months for what some say was a lack of clarity on wellness programs. Last October, the agency filed a lawsuit against Honeywell over its wellness program, claiming the program violated the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act by imposing penalties on employees who refused to participate in the company’s biometric screening program.

Thursday’s proposed rule aims to clarify how Title I of the ADA applies to employer wellness programs that are part of group health plans.

The proposed rule removes confusion for employers who are complying with the Health Insurance Portability and Accountability Act and the Affordable Care Act rules with respect to their wellness incentives, says Steve Wojcik, vice president, public policy with the National Business Group on Health. “If you’re complying with HIPAA and ACA rules you shouldn’t have any problems with the ADA,” he says.

The EEOC proposed rule coincides with an FAQ about wellness programs from the Departments of Labor, Health and Human Services and the Treasury, which aims to clarify what it means for a health-contingent wellness program to be “reasonably designed” and how compliance with DOL and HHS regulations on wellness programs affect compliance with other laws, such as HIPAA and the ADA.

“I think it’s very good news, at the end of the day, for employers. It removes a big cloud that had hung over the wellness program since the legal action of the EEOC,” says Wojcik.

The Senate and House of Representatives have introduced identical bills (S. 620 and H.R. 1189) to reaffirm laws already in existence that allow for employee wellness programs tied to a financial reward. How these bills will be affected by the EEOC proposed rule remains to be seen, says Tami Simon, managing director for Buck Consultants at Xerox.

“If the EEOC is pretty quick to turn around a final version [of the proposed rule] after the public comment period closes, we’ll have to see what the final rule says, then the House and Senate will have to decide if a bill is still needed,” she says.

The proposed rule is a step in the right direction, she says, and the EEOC “appears to understand the need for consistency among the different laws that apply many of the rules that come from HIPAA and the Affordable Care Act. … At the end of the day, though, the question is how is that application going to actually work itself out?”

The EEOC has also published a fact sheet for small businesses and a Q&A for the general public.

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