Wellness incentives

Wellness program incentives in question

Authored by Bukaty Companies on February 9, 2021

If the proposed EEOC wellness rules are accepted by the Biden administration, most wellness programs that make disability-related inquiries or require a medical examination may only offer a “de minimis” award in order to comply with the Americans with Disabilities Act (ADA) or Genetic Information Nondiscrimination Act (GINA).

The EEOC suggests a “de minimis” award would be limited to a water bottle or gift card of nominal value. Such rewards would be offered as an incentive for employees to complete a health risk assessment or biometric screening, generally referred to as participatory wellness programs.

A safe harbor within the proposed rules would allow employers to exceed the “de minimis” standard for health-contingent wellness programs, where participants must satisfy a standard related to a health factor. For example, an employee receives a reduced premium contribution for completing a biometric screening and achieving a body mass index (BMI) score of a particular value. For health-contingent programs, the award can be as great as what is allowed under the 2013 Health Insurance Portability and Accountability Act (HIPAA). Under HIPAA, employers can offer a reward as great as 30 percent of the total cost of employee-only coverage, or if the program extends to family members, the reward can be up to 30 percent of the cost of coverage for employees and dependents. For tobacco-related health-contingent programs, the reward can be as much as 50 percent. To comply with HIPAA, these health-contingent programs must meet four additional conditions.

• Individuals must be eligible to qualify for the reward at least once a year. 
• The program must be reasonably designed to promote health and prevent diseases.
•The full reward must be available to all similarly situated individuals, and a reasonable alternative (or waiver) must be provided.
•The health plan must disclose in all materials the availability of a reasonable alternative.

Once more is known on the Biden administration’s position on wellness programs, clients can discuss what changes, if any, are needed to ensure programs are compliant.






Blog Category: Compliance

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