In doing so, it staked out middle ground between an approach that would have sharply limited the use of incentives in wellness programs, and a more permissive approach consistent with regulations already in place under the Affordable Care Act (ACA). The proposed rule has the potential to shape, or reshape, future wellness programs. The extent to which it will do so, however, remains uncertain.
As I have described in a previous post, the drafters of the ADA acknowledged both the benefits and the risks of HRA-based wellness programs by limiting disability-related inquiries and medical examinations, but carving out an exception for voluntary wellness programs. The question of how to define “voluntary” lingered for many years. Is a program voluntary if an employee is offered an incentive for completing an HRA? What if the incentive is very large, or takes the form of a penalty?
In its April 2015 proposed rule, the EEOC decided to permit employer health plans to tie incentives to HRAs involving disability-related questions as well as to biometric exams. It limited the magnitude of such incentives, however, to 30 percent of the total cost of employee-only coverage. While this limit closely resembles the 30 percent ceiling applicable to health-contingent incentives under the ACA (42 USC § 300gg-4(j)(3)(A)), in some ways it is more restrictive.
Because HRA incentives are pulled under the ADA’s ceiling, there will be less room remaining to accommodate health-contingent incentives, such as premium discounts tied to cholesterol levels. Furthermore, the ACA ceiling is set at 30 percent of the cost of family coverage when incentives are offered to family members; the proposed rule makes no mention of such an adjustment. As a result, the proposed rule effectively represents a compromise between those who oppose incentives and those who would like to take full advantage of incentives permitted under the ACA.