EEOC Needs to Coordinate Wellness Guidance With ERISA Agencies, Benefits Attorneys Say

The Equal Employment Opportunity Commission's lawsuit alleging that Honeywell International Inc.'s wellness program violated anti-discrimination laws is a “gross overstep” that should provide a “wake-up call” to President Barack Obama's administration to take a better coordinated approach to developing wellness program guidance for benefits plan sponsors, said benefits attorneys with Groom Law Group Chartered.

Many employers are committed to using wellness programs with their health plans, because they see these programs as a good option to lower benefits costs, but are receiving “mixed signals” from the federal enforcement agencies on how to comply with their regulations, Seth T. Perretta, principal, said Nov. 12 during a Groom-sponsored webinar called Recent EEOC Activity Regarding Wellness Programs.

While the three agencies responsible for enforcing the Affordable Care Act—the Department of Labor and departments of Treasury and Health and Human Services—have “gone above and beyond” in providing guidance to the plan sponsor community to encourage the use of wellness programs, the EEOC hasn't developed any sponsor guidance, instead relying on its enforcement guidelines, said Thomas F. Fitzgerald, principal.

The EEOC is sending out a “completely different message” on wellness programs than the other agencies, which means that the administration needs to push for more coordinating among them, Fitzgerald said.

Wellness programs also received a boost when Congress codified regulations under the Health Insurance Portability and Accountability Act into the ACA, the attorneys said.

Under the ACA, employers that integrate participatory wellness programs in their group health plans can offer and pay incentives or rewards to employees who take part in such programs, as long as incentives or rewards are made available to all similarly situated employees.

Under health-contingent wellness programs, employees are required to meet health-related goals in order to receive incentives or rewards. In addition, employers that integrate health-contingent wellness programs into their group health plans can't link incentives and rewards to employees' ability to meet or satisfy health status-related standards, unless those wellness programs comply with several requirements, including that the incentives and rewards be made available to all similarly situated employees.

Wellness programs can't provide incentives or rewards that exceed 30 percent of the total premium cost of employee-only coverage or 30 percent of the cost of family coverage. For tobacco-cessation programs, the cap is 50 percent.

Excerpted from a story that ran in Pension & Benefits Daily (11/13/2014).

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