A federal lawsuit filed in October 2014 seeking to prevent Honeywell International Inc. from penalizing employees who don’t participate in its wellness program angered many business leaders who are now rallying behind proposed legislation that reaffirms the right of employers to use wellness incentives.
Two companion bills, under the Preserving Employee Wellness Programs Act of 2015, were introduced in March by Senate and House Republicans “to provide legal certainty — and eliminate confusion caused by the EEOC for employers offering wellness programs that reward healthy lifestyle choices,” according to a House Committee statement.
“When the EEOC moved forward, that was an impetus for Congress to get involved,” said Katy Spangler, senior vice president for health policy at the American Benefits Council. “The bills really restore certainty to employers that they lost when the EEOC proceeded with litigation.”
The EEOC, which surprised employers in April with guidelines taking a more supportive stance on wellness programs, claims that Honeywell’s employee wellness program is not voluntary under the terms of the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act. The company, which offers incentives to employees who complete biometric screening, counters that its incentives fall within the guidelines established by the Health Insurance Portability and Accountability Act.
The new EEOC guidance states that employers can offer incentives to wellness participants of up to 30 percent of their insurance premium.
The congressional bills establish that employee wellness programs that offer financial rewards that do not exceed 30 percent of the total premium cost of the employee’s coverage as outlined by HIPAA, do not violate the ADA or GINA. Under the ADA, an employer can require employees to undergo medical examinations only if they are “job-related and consistent with business necessity.”
The legislation “strikes the right balance” between incentive flexibility and discrimination prevention, Spangler said.