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Court Vacates EEOC’s Wellness Rules for 2019

Employer Wellness Programs Compliance

On December 20, 2017, the U.S. District Court for the District of Columbia vacated key provisions of the Equal Employment Opportunity Commission’s (EEOC) final rules for employer-sponsored wellness programs. However, to avoid disruption to employers, the court stayed its ruling until Jan. 1, 2019. 


The EEOC issued final rules in 2016 that describe how the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA) apply to employer-sponsored wellness programs. These rules, which became effective on January 1, 2017, allow employers to offer wellness incentives of up to 30 percent of the cost of health plan coverage. Prior to these rules, it was unclear whether incentives to participate in a wellness program were permissible under the ADA and/or GINA and, if so, in what amount.

 Court Decisions

In an earlier ruling (08/22/2017), the court held that the EEOC failed to provide a reasoned explanation for the incentive limit and sent the final rules back to the EEOC for reconsideration.

In its latest ruling (12/20/2017), the court vacated the final rules’ incentive limits, stating that the EEOC’s unhurried approach for issuing new wellness rules is unacceptable. As previously mentioned, the court stayed its ruling until January 1, 2019, to avoid disruption for employer-sponsored wellness plans. According to the court, this extended deadline will give employers the time they need to structure their wellness plans for 2019, knowing that the EEOC’s incentive limits have been thrown out. The court also encouraged the EEOC to speed up its timeline for issuing new rules on wellness program incentives.

Action Steps – What does this mean for employer-sponsored wellness programs?

For now, the EEOC’s final wellness rules remain in place. If your employer-sponsored wellness program is currently compliant with the 2016 EEOC ruling, you should stay the course and continue to champion the benefits of wellness and good health to your organization, employees and their family members.

Beginning January 1, 2019, these final rules on permissible incentive limits for voluntary wellness programs will no longer apply. Remove the uncertainty of how future changes and/or rulings may impact your wellness program by working with our expert Health Risk Management & Wellness consulting team from Scott Benefit Services. As a trusted advisor and resource, we will continue to monitor any EEOC developments and we are available to provide strategic guidance specific to the level of incentives for 2019.

Written by Dina Fonzone

As Vice President of Scott’s Health Risk Management Team, Dina focuses on value-based, business-driven health risk management strategies that incorporate cultural and behavioral approaches to improve performance. She began her career in employee benefits and health care management in 1998, working with employers and their health plans in disease management, health risk management, wellness and organizational development capacities. In 2001 she joined Scott and has played a key leadership role in developing our proprietary health risk management process. Dina has served as a sourced expert in numerous national magazines and trade publications and as a presenter at national conferences on the topic of health risk management.

Employer Wellness Programs Compliance Update Three takeaways from Secretary of Labor v. Macy’s, Inc. et al

Employer Wellness Programs Compliance

The HIPAA nondiscrimination regulations aren’t new to most employers with wellness programs. Employers who offer health-contingent wellness programs are especially familiar with the requirement to provide a reasonable alternative standard as part of their wellness program compliance.

Currently, a pending district court case, Secretary of Labor v. Macy’s, Inc. et al, has placed a greater focus on the reasonable alternative standard portion of the HIPAA nondiscrimination regulations. This focus is specific to health-contingent wellness programs that are outcomes based. These wellness programs require individuals to attain or maintain a certain health outcome (or outcomes) to receive a reward. A tobacco health plan premium surcharge is one example.  Although this is an active case, with no official judgements or rulings, the flag has been raised by the Department of Labor specific to the reasonable alternative standard and outcomes-based programs. 

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Open Enrollment is Over … Now What?

Open Enrollment

Many companies with calendar-year benefit periods have recently wrapped up their open enrollment, or will be doing so in the near future. Open enrollment can be a productive experience, but it can also cause significant stress for employees and employers alike. As every HR professional knows, once employees have made their benefit selections and completed their forms, there is still work to be done.  

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IRS to Enforce Employer Shared Responsibility Payments

Healthcare Reform

After a year of many questions surrounding the future of the Affordable Care Act (ACA), the IRS has recently provided some answers indicating that the agency will indeed move forward to enforce the employer shared responsibility requirements of the ACA.

Based on the recent update to its online resource, Questions and Answers on Employer Shared Responsibility Provisions Under the Affordable Care Act, the IRS will begin issuing notices (Letter 226J) to employers in late 2017 for potential liabilities from the 2015 calendar year. 

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