The Equal Employment Opportunity Commission (EEOC) has indicated that it plans to issue new proposed rules on permissible wellness incentives under the Americans with Disabilities Act (ADA) in 2020. These proposed rules are expected to provide guidance to employers on the incentive limits for wellness plans that ask for health information or include medical exams.

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In May 2016, the EEOC issued final rules addressing how the ADA applies to employer-sponsored wellness programs. The final rules included a 30% limit for wellness incentives. A federal court vacated this incentive limit, effective Jan. 1, 2019. Consistent with this court ruling, the EEOC removed the incentive limit from its final wellness rules.

The EEOC was expected to issue new proposed rules in 2019, but the rules have been delayed. The EEOC’s fall regulatory agenda includes an early 2020 timeframe for the proposed rules.


Background

Under the ADA, an employer may make disability-related inquiries and require medical examinations after employment begins only if they are job-related and consistent with business necessity. However, these inquiries and exams are permitted even if not job-related and consistent with business necessity if they are part of a voluntary wellness program.

The ADA does not define the term “voluntary” in the context of wellness programs. For many years, the EEOC did not definitively address whether incentives to participate in wellness programs are permissible under the ADA and, if so, in what amount. On May 17, 2016, the EEOC issued final rules that describe how the ADA applies to employer-sponsored wellness programs. These rules became effective on Jan. 1, 2017.

The EEOC’s final rules restricted incentives offered to an employee who answers disability-related questions or undergoes medical examinations as part of a wellness program. The restriction was 30 percent of the total cost for self-only health plan coverage.

Effective Jan. 1, 2019, the EEOC removed the incentive limits from its final wellness plan rules to implement a court’s order that vacated that portion of the final rules.