Employers may legally offer employees and their spouses incentives to participate in an employer-sponsored wellness plan if it might improve their health or prevent disease, according to two final rules released by the Equal Employment Opportunity Commission May 16.

The final rules amend existing Genetic Information Nondiscrimination Act regulations and create new Americans with Disabilities Act regulations regarding how employers can incentivize employee participation in employer-sponsored wellness plans. Under both rules, employers can offer employees and their spouses incentives to encourage wellness plan participation that equal up to 30 percent of the total cost of self-only coverage.

Unchanged from the proposed rules, both final rules specify that participation in an incentive program must be completely voluntary and under GINA that the participating employee’s spouse must provide a plan with prior, knowing, voluntary and written participation authorization.

According to the final ADA rules, a wellness program is considered voluntary if it doesn’t require employees to participate, doesn’t deny coverage for non-participation, doesn’t coerce employees to participate and provides employees with a notice concerning information collected.

The notice concerning information collected must clearly explain what medical information will be obtained, how that information will be used, who will receive it and how the information will be kept confidential.  The EEOC stated it will provide a sample notice on its website within 30 days of the final rule’s publication.

The final rules further specify that wellness plans may not simply gather employee information and that they must be reasonably designed, meaning they have a reasonable chance of improving the health of or preventing disease in participating employees.

Also unchanged from the proposed rules, employers can’t offer participation incentives in exchange for health information about an employee’s biological or adopted children.

The final rules add that employers may not require employees to sell, exchange, share, transfer, disclose medical information or waive confidentially protections to participate in a wellness program.

Both the ADA and GINA final rules take effect on the first day of the first employer health plan year that begins on or after Jan. 1, 2017.

See related story, EEOC Issues Final Rules on Wellness Plan Incentives.

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