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Tips for Employers with Mid-Year Plans Post AARP v. EEOC

The following article does NOT constitute legal advice and should not be used as such. It is for educational purposes only. Readers should retain legal counsel to obtain definitive answers.

Many employers with mid-year plans (i.e., plans that start on July 1 each year and end on June 30th of the next year) may be wondering what to do about their wellness program incentives for the 2018-19 plan year. The AARP v. EEOC case has confused a lot of people in the workplace wellness industry, and employers with mid-year plans may be the first group to really grapple with the uncertainty that lies ahead. As noted in a previous blog post, the District Court for the District of Columbia issued an opinion in August 2017 vacated the incentive limits of 30% of the total cost of self-only coverage under the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA).

A later order from the court delayed the vacatur until January 1, 2019. The court believed that employers could use 2018 to make adjustments to their employee wellness incentives in preparation for 2019 plans. However, without definitive guidance from the EEOC before 1/1/19, such adjustments may prove challenging. This blog post provides some practical tips for employers who might find themselves scratching their heads about what to do with their wellness incentives for 2019.

For employers with mid-year plans that still have the flexibility to be amended, it may be a good idea to do one of three options with regard to incentivizing employee and/or spouse health risk assessments or biometric screens:

  1. Don’t incentivize these “medical exams” after 1/1/19, and make sure you pay any incentives earned in 2018 for such exams before 1/1/19.
  2. Significantly reduce incentives earned for “medical exams” after 1/1/19 so that any employee or spouse, regardless of income, would view the incentive as small enough to consider disclosing their health information voluntary.
  3. Continue offering an incentive, but offer an alternative activity that is not a medical exam for the employee or spouse to earn the same reward. This could be a physical fitness activity, a nutritional activity, an educational activity, etc. Just make sure that if your wellness program is part of a group health plan that it also complies with the wellness incentive rules under the Affordable Care Act (ACA).

Employers who adopt one of these strategies may reduce their risk of violating the wellness incentive rules under the ADA and GINA.

For employers who may not be able to amend their wellness program incentives for a mid-year plan in 2018-19, it will be important to weigh the risk of an employee complaint after 1/1/19 or introducing an alternative way to earn an incentive that doesn’t involve a medical exam. Those employers may find it useful to consult with legal counsel when considering options on how to move forward after 1/1/19.


Barbara Zabawa

Barbara J. Zabawa

President of the Center for Health and Wellness Law, LLC

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