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EEOC Relooks Wellness Regulations - New Guidance Expected in Fall 2019

In August 2017, Judge John Bates of the U.S. District Court for the District of Columbia issued a memorandum in the AARPs lawsuit against the EEOC. In his decision, the judge sided with AARP, finding that the EEOC had provided inadequate justification for its decision to allow plans and insurers to offer incentives of up to 30% of the cost of self-coverage in exchange for an employees’ participation in an employer-sponsored wellness program. The AARP argued that the 30% premium differential essentially negated the voluntary nature of the wellness program in violation of the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA).  The judge agreed that there was no evidence regarding the impact of incentive threshold levels on the voluntary nature of a wellness programs. The judge chose to keep the regulations in place, providing the EEOC with an opportunity to provide more evidence for its decision. As a result, the EEOC recently announced it will take until August 2018 to reconsider two regulations surrounding employer-sponsored wellness programs and expects to issue a new final rule by October 2019, with substantive changes to the regulations not likely taking effect until January 2021.  Timing estimates provided from the EEOC may change based on developments during the course of its reconsideration and rulemaking process and the significance of the proposed changes, if any.

Employers should ensure compliance with the final ADA and GINA regulations in their current form while closely monitoring updates from the EEOC so they can start preparing for likely changes as soon as they are made public.