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UPDATE: The EEOC and Well-Being Program Incentives: What You Need to Know

Encouraging employees and members to make healthy lifestyle changes can certainly be a challenge. New well-being program regulations set to be put into place in June 2019 might make it even more difficult in the coming years.

You may recall, a federal district court decision last year raised questions about the future of incentives and the design of well-being programs, specifically the rules in question are those that permit employers to offer incentives of up to 30 percent of the cost of self-only coverage for the group health plan. Several weeks ago, the Equal Employment Opportunity Commission (EEOC) provided a much-anticipated update. They announced that the incentives portions of the rule will be vacated on Jan. 1, 2019, with proposed new rules targeted for June 2019.

An overview of the situation.

Until recently, employers and health plans have been able to design well-being programs that offer incentives of up to 30 percent of the cost of an employee’s health insurance premiums. This can add up to valuable incentives for the people participating, which is a large part of what makes these programs so successful. In fact, incentives are associated with 20 percent higher participation in wellness programs.1

But the amount of incentives your organization will be able to offer may soon change. In 2016, AARP filed a lawsuit claiming incentives of up to 30 percent of the cost of a person’s health insurance premiums meant worker participation in those well-being programs wouldn’t be “voluntary.” And according to the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA), participation in an well-being program must be voluntary.

What exactly does that mean? Well, the issue is around the definition of “voluntary.” The fear is that incentives will become so high, they will become coercive and participation in the well-being program will become involuntary.

What does it mean for your organization?

Until the EEOC issues the new rules, there will be uncertainty for employers and health plans as they try to decide what kind of incentives program to put in place. Ultimately, you will have to decide between keeping your program as is, or implementing a new program without knowing what the EEOC regulations will be after June 2019.

If you decide to design a new incentives program, consider reading our original blog post on the EEOC wellness program updates.

The future of incentives programs.

Until the EEOC issues the new rules, we won’t know what the future of incentives programs will look like. But no matter what happens, it’s important to start considering how their decision will affect your organization and the well-being of your population. If you are looking for help in developing the right incentives program for your organization, you can start with our educational e-book, 7 Steps to Smart Incentive Design.

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