The EEOC Goes After Company's Wellness Incentives Program | Mercer US

The EEOC Goes After Wellness Incentives

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The EEOC Goes After Wellness Incentives
Calendar31 October 2014

The Equal Employment Opportunity Commission (EEOC) grabbed headlines this week by filing for a temporary restraining order against Honeywell, claiming that the company’s wellness program violates both the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA). While the EEOC had filed two previous suits in this area, both were against companies that had taken fairly extreme measures against employees who didn’t perform actions required to receive wellness incentives. In this case, the EEOC is alleging violations by a wellness program closer to the mainstream in which employees are required to undergo biometric testing to help identify health risks as well as a blood test to determine whether the employee or spouse uses tobacco.

According to the EEOC, the financial impact of not taking part in the screenings — two separate premium surcharges and the loss of an HSA contribution, amounting to a maximum of $4,000 for an employee and spouse — is enough so that employees are essentially being forced to undergo screening. Honeywell has called the suit “frivolous” and says the EEOC is “out of step” with the current health care marketplace — especially given that their program meets the requirements of both the ACA and HIPAA. Employer groups have been frustrated that the EEOC has not issued guidance about how the ADA and GINA apply to wellness programs, despite repeated appeals over the past few years.

While the EEOC action is obviously worrisome for employers that use financial incentives, here are a couple of points to keep in mind before panicking: First, we don’t know yet whether the restraining order will be granted — a hearing will take place on Monday. Second, even if the restraining order is granted, the case is being heard in a lower court in Minnesota, so it will have limited jurisdictional impact (although the ripple effect could be significant). So even if your program design is similar to Honeywell’s, it’s most likely that you’ll have time to consider a response. Long-term, it’s worth asking yourself two questions about your incentive strategy: how much of an incentive — and what type of an incentive — is enough to accomplish your goals, and what’s the best way to communicate the incentive to avoid employee backlash.

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