What upcoming federal wellness rules mean to your company

It’s one of the best ways to help contain healthcare costs: a wellness program. And it’s about to change, thanks to some new rules from the feds. 

The Equal Employment Opportunity Commission (EEOC) just issued proposed rules that spell out what’s in and out of bounds with your wellness initiatives.

Here’s a rundown of what’s coming your way.

Upcoming parameters to work within

The proposed EEOC rules break down what employers must do both in creating and administering wellness programs.

Of course, you know any wellness initiative must be voluntary. But there are other constraints now, courtesy of new rules:

1. The goals of your initiatives must be achievable. Your company must be “reasonably confident” that employees can meet the goals (quitting smoking, losing weight, etc.).
2. The info you collect must be used in specific ways. Wellness programs are notorious for collecting health data. But the EEOC wants companies to be more careful about what they do with it. Your company can’t collect employee health info if you aren’t going to either share it with employees, or use the information to design your specific health program.
3. You must disclose specific program info to employees. Once the rules are finalized, you’ll have to provide employees with a notice that covers: what medical info will be collected as part of the program, who will receive it, how it’ll be used and how it’ll be kept confidential.

What it means to your incentives

Of course, the biggest factors in any wellness program’s success are the incentives you offer to get folks on board.

Under the proposed rules, the amount of the incentive your company can offer for an employee to either participate in your program or to achieve health outcomes can’t exceed 30% of the total cost of employee-only coverage. That goes for disincentives, like penalties for unhealthy behaviors, too.

So for example, if the total cost of coverage – paid by both you and the employee – for self-only coverage is $5,000, the maximum incentive you can offer for an employee under that plan is $1,500.

That begs the question: What about the fact that the Affordable Care Act lets you incentivize for smoking cessation at 50%?

The proposed EEOC rules do address that seeming disparity. If your tobacco-related wellness program doesn’t require disability-related or medical inquiries (like a smoking cessation class or asking whether or not an employee uses tobacco), you may still offer incentives up to 50% of the total cost of employee-only coverage.

But if your company requires a medical exam (such as measuring nicotine levels in a blood draw) you’ll be held to the 30% limit.

The comment period for the rule ends in June. Stay tuned for the final rules and its effective date.