Validity of Wellness Programs Questioned

October 13, 2018

Many wellness programs, which seek to encourage healthier lifestyles, offer financial incentives to individuals who participate in the program. Under current EEOC guidance, if the plan requires a medical examination or medical questionnaire as part of participation in the program, the plan can only reduce a participant’s health care costs by a maximum of 30%. Participation in the program must be voluntary.

 

However, a recent ruling from the D.C. Circuit Court ordered the 30% reduction invalid as of January 1, 2019. The judge found that workers may feel coerced into providing private medical information because they cannot afford to forgo such a large reduction of health costs—making the wellness program not truly voluntary. This ruling only affects wellness programs that require the sharing of private medical information, not programs that require, for example, gym membership.

 

The EEOC will not provide a new maximum reduction percentage until 2021, leaving plans without guidance. Plans may consider reducing the incentive or offering multiple participation methods, at least one of which does not require the disclosure of private medical information.

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