EEOC and Employee Wellness Programs: The Saga Continues

By Lehr Middlebrooks Vreeland & Thompson, P.C.

December 28, 2018

This article was prepared by JW Furman, EEO Consultant Investigator, Mediator and  Arbitrator for the law firm of Lehr Middlebrooks Vreeland & Thompson, P.C. Prior to  working with the firm, Ms. Furman was a Mediator and Investigator for 17 years with the Birmingham District Office of the U.S. Equal Employment Opportunity Commission (EEOC). Ms. Furman has also served as an Arbitrator and Hearing Officer in labor and  employment matters. 


With a week to spare before the AARP v. EEOC court decision to vacate regulations concerning wellness program incentives goes into effect, the EEOC rescinded parts of its May 2016 rules. We recall that the EEOC published these rules to clear up controversy surrounding the “voluntary” provisions of the Americans with Disabilities Act and Genetic Information Nondiscrimination Act in connection with the Health Insurance Portability and Accountability Act authorizing employee incentives to participate.

HIPAA expressly permits the use of incentives in wellness programs. The ADA and GINA generally prohibit employers from collecting certain health information from employees but make an exception if collected as part of an “employee health program” so long as the employee’s (and spouse’s) participation is voluntary.
Neither defines “voluntary.” The EEOC originally opined that such wellness programs were not voluntary, but its 2016 rules allowed employers to offer an incentive of up to 30% of the cost of self-only insurance coverage, the same cap that applied under HIPAA and its ACA amendments.

AARP v. EEOC lawsuit argued that the 30% incentive permitted by the EEOC final rules were inconsistent with the “voluntary” requirements of the ADA and GINA, and the incentive for employees who participate in wellness programs is also a penalty for those who do not and will coerce employees into disclosing protected health information when they otherwise would not choose to do so. The judge first ordered the EEOC to replace its rules because it did not articulate good reasons for allowing the incentive, but he did not immediately vacate them. AARP asked him to reconsider after the EEOC said it might not replace until 2021 and then ordered the rules vacated effective January 1, 2019.
The EEOC has now removed the section of its regulations that permitted incentives. What remains at this point are laws and regulations that neither expressly prohibit or permit employers to offer incentives for employees to participate in wellness programs, require employee participation to be voluntary, and do not define “voluntary.”

In March 2018, the EEOC advised the judge in AARP v. EEOC that it did “not currently have plans to issue a notice of proposed rulemaking addressing incentives for participation in employee wellness programs by a particular date ...” and said it may issue such a notice sometime in the future, noting that two nominees for its Commission (including the chair) were still awaiting confirmation. And those two Commission nominees, along with the EEOC General Counsel nominee are still waiting. And it looks like employers will continue to wait for guidance on these issues.