EEOC Provides Informal Follow-Up Guidance On Wellness Programs

October 7, 2016

In July, the U.S. Equal Opportunity Employment Commission issued an informal discussion letter in response to requests for clarification of incentive limits for employer-sponsored wellness programs. The request came in the wake of long-awaited final EEOC rulings on employer-sponsored wellness programs, released in May, that placed limits on employer wellness programs, including incentive amounts employers can offer employees to participate in the programs. The final rulings stipulated that incentives could not exceed 30% of the total cost of a major medical plan, but left some questions unanswered, including how employers that offer multiple wellness plans should calculate the maximum incentive limit.

The July letter noted that “the EEOC concluded that where an employer offers more than one group health plan option, but enrollment in a particular [emphasis added] plan is not required to participate in a wellness program, the maximum incentive is based on the total cost of the lowest cost self-only coverage under a major medical group health plan that the employer offers.”

The motivation for employers to encourage participation is in wellness programs is to achieve better health outcomes for employees, which translates to lower health care costs and higher workforce productivity for employers.

Since the way wellness programs are administered and legislation related to wellness continue to evolve, employers should expect additional updated guidelines from the EEOC.
To read the entire informal discussion letter from the EEOC, click here.

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