Wellness plans are highly regarded programs that benefit employers and employees alike. But, just as these initiatives are maturing and providing more value to businesses and individuals alike, a lawsuit has been filed that questions the legality of financial incentives associated with workplace programs that include preventative health screenings or health risk assessments.

Now confusion over possible discrepancies between the Affordable Care Act’s guidance on wellness plan incentives and federal laws enforced by the Equal Employment Opportunity Commission have advisers and their employer clients back to square one on what is and what isn’t permissible for employer wellness programs.

When it became law in 2010, Congress included a key provision in the ACA specifying that employers could offer employees incentives to participate in wellness programs.

This provision was an overdue endorsement for appropriately-designed wellness plans that fueled a significant increase in adoption across businesses of all sizes and categories. More than 85% of employers now offer some sort of wellness bonus to employees who take steps to live a healthier and more active lifestyle. The “health meets wealth” movement is also becoming more generous, with the average amount of the incentive offered to health plan participants steadily increasing during the past four years, according to a recent survey by the National Business Group on Health.

The EEOC issued its own guidance on incentives in May 2016, but a court recently tossed out a key portion of those rules, stating that they would no longer be effective starting January 1, 2019. Plan administrators tasked with writing the guidelines for wellness programs going forward are rightfully frustrated with all of the uncertainty around providing employees with wellness incentives.

Privacy concerns
Some of the criticism still facing wellness programs centers on the privacy of their participants. Wellness programs are voluntary, however, and employers may not force employees to participate or disclose sensitive health information. Furthermore, existing HIPAA and ACA regulations include significant provisions to protect privacy, secure data, limit the scope of the data collected, regardless of one’s participation in a wellness program.

These regulations also require wellness programs to be reasonably designed in a way that uses evidence-based methods to predict and prevent disease. There are also requirements that these programs provide reasonable alternatives for any employee failing to earn an incentive to do so by other means.

The Population Health Alliance urges Congress and the EEOC to provide guidance on the rules governing workplace wellness program incentives in accordance with the authority to offer such incentives codified in the ACA. As the American Benefits Council recently testified, “the future of workplace wellness programs is at risk” because of conflicting regulations and rulings.

With millions of Americans already enrolled in a voluntary wellness plan, it’s important that advisers and their employer clients have clear and consistent rules to follow when providing these beneficial programs moving forward.

Register or login for access to this item and much more

All Employee Benefit Adviser content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access