EEOC Clarifies Employer Wellness Program Rules

Date: May 17, 2016 Last Edit: May 18, 2016

Discounts Can Be Offered If Employees, Spouses Answer Health, Lifestyle Questions

The Equal Employment Opportunity Commission has issued its final rule for employer wellness programs. When announcing the rule, the EEOC in a Small Business Fact Sheet said that it was designed to clarify previous statements that “employers may make inquiries and conduct medical examinations that are part of a voluntary health program.” The terms “voluntary” and “health program” were clarified in the final rule, which also answers “whether employers could offer incentives to encourage employees to participate in such programs.” The rule specifies that employers can “provide limited incentives as part of wellness programs that make disability-related inquiries or require medical examinations.” These incentives can be either financial or so-called “in-kind”, such as prizes or time-off awards. USA Today reports that the EEOC proposed the new rules last year, but there were concerns that such an incentive might violate the Americans with Disabilities Act. On Monday, however, the EEOC confirmed such an incentive would not violate federal law. Reuters elaborates that the EEOC said it was specifically trying to explain how employers can provide financial incentives to employees who participate in such programs without violating privacy laws. According to Reuters, the rules represent a compromise between the commission and businesses that opposed its position that incentives make the programs involuntary and therefore illegal.

What This Means For Small Businesses

Employer wellness programs offer a unique way for businesses to both lower healthcare costs and engage their employees. NFIB previously provided an in-depth look into the financial benefits of these programs, pointing out that wellness programs can translate directly into an improved bottom line as healthier employees have lower absenteeism. The challenge for small businesses is to offer programs that will keep their employees healthy without generating undue risk. By clarifying its rules on employer wellness programs, the EEOC has helped alleviate some of the risk and uncertainty small businesses face in trying to implement such programs.

Additional Reading

The Wall Street Journal reports the new rules will go into effect next year and apply to all workplace wellness programs.

Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.

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