Equal Employment Opportunity Commission
Employee Benefits

EEOC Mumbo Jumbo

Claire Pancerz
Claire Pancerz
Compliance Director, Employee Benefits

There was a popular commercial on television when I was in law school, with a lawyer and judge speaking together in court. The judge opined, “Mumbo jumbo, mumbo jumbo” while the lawyer nodded sagely and replied, ‘Jumbo mumbo, jumbo mumbo.” The voiceover then intoned, “Tired of all the legal mumbo jumbo? If so, hire XYZ Law Firm!”

You may feel the same way about wellness regulations, specifically those from the Equal Employment Opportunity Commission (EEOC). There’s a LOT of legal mumbo jumbo going on around these regulations.

Let’s see if Holmes Murphy can clear up a little of this for you. Prior to EEOC regulations, there were HIPAA and ACA regulations that dealt with wellness, which divided programs into two categories: participatory and outcomes-based.

However, the EEOC had always made it clear to employers that just because wellness programs satisfied HIPAA regulations didn’t mean an employer would not run afoul of the Americans with Disabilities Act or the Genetic Information Non-Discrimination Act.

In 2016, the EEOC offered up its own wellness regulations. These stated that any wellness programs — whether participatory or outcomes-based — requiring a medical test could prove that they were voluntary (and compliant) by limiting incentives to 30 percent of the premium for self-only coverage.

The AARP sued the EEOC over this voluntary standard, declaring it was “arbitrary and capricious.” They asked the court to set aside the rules. In 2017, the court agreed the EEOC’s voluntary standard was arbitrary and told the EEOC to reconsider the rules. But the court kept the EEOC wellness regulations in place so employers would still have regulations to guide them.

The EEOC clarified that final revised regulations wouldn’t be released until 2021. Earlier this month, the federal court agreed to set aside the wellness rules in 2019. Unless the EEOC wants employers to be without its guidance between 2019 and 2021, it will have to come up with some new rules faster than anticipated.

What should employers do in the meantime? We think the answer is fairly straightforward: EEOC regulations should be used for wellness plan years beginning in 2018. Beginning in 2019, employers can stay on the right side of the regulators by continuing to use that 30 percent standard for any incentives offered for completion of a wellness program. This allows employers to meet HIPAA and ACA regulatory requirements while staying within the guidelines that the EEOC previously laid out.

Keep your wellness program in place, and your eye on the EEOC!

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