Wellness Programs May Have to Adjust

A federal district court decision may bring changes to employer wellness programs. Current federal regulations allow employers to offer an incentive of up to 30 percent off the employee portion of group health program premiums to employees who participate in a wellness program. See the EEOC rule and the joint rule promulgated by the IRS, the Employee Benefits Security Administration, and the Centers for Medicare & Medicaid Services.

Critics have charged that those rules are ineffective and unfair to employees with health problems. See, for example:

• David S. Hilzenrath, "Misleading claims about Safeway wellness incentives shape health-care bill"
• Michael Hiltzik, "A federal judge takes aim at 'voluntary' company wellness programs that invade your privacy"
• L.V. Anderson, "Workplace Wellness Programs Are a Sham"

The AARP challenged the EEOC rule for failure to provide a reasoned explanation in support of its adoption. Judge John D. Bates of the United States District Court for the District of Columbia sustained the challenge in a decision on August 22, 2017, but initially declined to vacate the rule. In his latest ruling on December 20, 2017, Judge Bates ordered the rule vacated, but gave the EEOC until January 1, 2019, to develop a new regulation that satisfies his concerns.