The U.S. Equal Employment Opportunity Commission (EEOC) voted 2-1 June 11 to move forward a proposed rulemaking that would allow only a "de minimis" financial incentive to encourage employee participation in wellness programs without violating the Americans with Disabilities Act (ADA).
Commissioner Victoria Lipnic said at the commission's public meeting Thursday that the rule would be submitted to the White House Office of Management and Budget for review, adding that "there are many steps to go in this process." Lipnic and Chair Janet Dhillon, the EEOC's two Republican members, voted in favor of advancing the proposal while Commissioner Charlotte Burrows, the agency's lone Democrat, voted against.
The rulemaking follows a failed previous attempt to implement two similar rules in 2018 that the EEOC rescinded at the direction of a federal judge. The rules amended the ADA and the Genetic Information Nondiscrimination Act (GINA) to permit employers to use a penalty or incentive of up to 30% of the cost of self-only coverage to encourage participation in wellness programs that involved the disclosure of certain ADA- and GINA-protected information.
The AARP sued the commission, alleging that the level of incentives provided for in the rules was inconsistent with the "voluntary" standards of ADA and GINA (AARP v. EEOC, No. 16-2113 (D.D.C. Aug. 22, 2017)). A federal district court determined that EEOC had failed to provide a reasoned explanation for its decision to adopt the 30% incentive levels and remanded the rule for reconsideration.
EEOC drafted its latest proposal in response to the court's order, it confirmed in a June 11 statement. The rule will propose that employers, for most wellness programs, offer no more than "a de minimis incentive" to encourage participation and meet other requirements to comply with the ADA. But the rule would also permit certain wellness programs to offer the maximum allowed incentive under the Health Insurance Portability and Accountability Act’s 2013 regulations.
The agency's public meeting saw objections to the rule from Burrows, who said the rule misreads the ADA by applying the law's "safe harbor" provision to employee wellness programs and raises concerns about how employers will collect and secure employees’ personal data.
"This rule carries unexpectedly high risks for the medical privacy of every employee in America," Burrows said. "I cannot support the rule in its current form."
Lipnic said she "respectfully disagreed" with Burrows' position on the application of the safe harbor provision, adding that the rule as drafted "does provide a solid basis to solicit comments." Dhillon said she "fully supported the rule as written."
If approved by the White House, the proposal will be published in the Federal Register and stakeholders will be able to submit comments.