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EEOC releases strict new wellness incentive limits

Updated: Jan 21, 2021

January 21st Update: Looks like we may be wrong about our initial take: it's likely even worse, for vendors and employers. Reading the tea leaves suggests an existential threat for clinical wellness programs. These rules protecting outcomes-based programs are stillborn. How sure are we of this? In exchange for a 20% premium to our regular price, you get a free additional year of Quizzify, if indeed these rules do take effect.


Outcomes-based programs may be toast. This will be covered in the webinar.

The EEOC just released their new wellness rules. There are a few things you need to know about them. These will be discussed at length in our webinar, together with wellness law uberguru Barbara Zabawa, on Monday, February 1st at 1:00 EST. You can register here.

Barbara has some additional insights, so you might want to look at her blog post as well. Meanwhile, here are our Six Things.

1. The new rules virtually eliminate most wellness incentives for participation-based clinical programs

A federal judge said that nontrivial incentives (which is to say, most of them) had to go…and they went. The new rule allows only de minimis incentives (the EEOC’s words) for clinical programs that are participatory in nature. They gave the examples of water bottles and gift cards.

This -- plus the possibility of disclosure of personal health information -- has the potential to end most clinical wellness programs, but our webinar, and the rest of this blog post, will show how the EEOC’s rule can be (legally, of course) hacked.

Incentives/penalties/premium differentials of up to 30% for outcomes-based programs will still be in the Safe Harbor, as far as the Americans with Disabilities Act is concerned. Later, and in the webinar, we will observe how outcomes-based programs may instead violate the Affordable Care Act (ACA), as written today.

2. The timeline to implementation is measured in months

Smart money would say 01/03/2022 is the go-live date, at the latest. Here’s how events would unfold until then. First is what you see right here – the actual proposed rules. Next comes the formal Notice of Proposed Rulemaking, or NPRM. Within weeks (though no date is projected yet), this NPRM should be published in the Federal Register’s mellifluously named Notices of Proposed Rulemakings.

At that point comments are possible for 60 days. Following those 60 days, the EEOC will regroup, make lots of clarifications and some minor tweaks, and then they will publish the actual rules with a go-live date. Major tweaks would trigger another 60-day comment period, because they are essentially new rules. Those are uncommon.

This 60 days is called the Public Comment period, which is ironic because I’m only exaggerating slightly to say that no member of the public has ever made a comment during any of these public comment periods about any proposed rule, ever. It’s all about lobbyists trying to protect their revenues. This rule is no different. You will be able to tell who makes the most money in wellness by who writes the comments.

Because of that, it is important to be heard. One thoughtful comment, backed with evidence, may outweigh dozens of self-interested comments. Here are some tips on how to comment, except that no Quizzify customer needs to, which is one reason that...

3. ...Quizzify supports the rule.

Here’s why.

Quizzify totally supports appropriate screenings. Many of us at Quzzify, including me, get screened according to the US Preventive Services Task Force (USPSTF) guidelines. Guidelines differ by age, health, and gender. Most wellness vendors don’t make those distinctions. Instead, they screen every employee every year.

As a result, many people get overscreened. The Journal of the American Medical Association calls overscreening an “increasingly recognized problem” due to the stress and potential overtreatment harms of false positives. And, of course, the expense.

Quizzify’s view is therefore that employees who may benefit from screening should be encouraged to voluntarily get screened according to guidelines. Those employees who are not supposed to be screened (younger and healthier employees) can do something else to earn their incentive. Scroll down to see a poster to that effect, Quizzify has been using some variation of this for years.

4. Quizzify customers with participatory programs don’t have to change a thing

In a word, nothing. As long as you use this poster, or some variation of it (obviously the dates will change), you can maintain your incentive structure as is. No need to take our word for that. We will indemnify your entire program if it includes Quizzify in this fashion.

5. Quizzify customers with outcomes-based programs need change only one thing

The EEOC is keeping these programs intact, using some highly nuanced reasoning that would be of great interest to an administrative law attorney but isn’t worth repeating here. The bottom line: you can continue to require employees to submit to these programs, subject to fines/premium differentials of up to 30% of total premium.

However, most outcomes-based programs, with the notable and the well-documented Validation Institute-validated exception of US Preventive Medicine, fall short of the ACA’s standard of being “reasonably designed to reduce risk or prevent disease.” The reason is that testing everyone annually for everything – as almost every outcomes-based program does – generates far more false positives than true positives, the subject of a future blog post. It’s why the American Association of Family Physicians, Consumer Reports, and the Journal of the American Medical Association recommend fewer screenings.

The EEOC can’t protect you from ACA lawsuits, but Quizzify can and does. Our indemnification applies here as well. There is one asterisk, which is if an employee asks for the quizzes instead of a screen as a "reasonable alternative," that request must be fulfilled.

Otherwise, some version of this virtual or literal breakroom poster is all you need, in order to trigger our indemnification.

6. The Webinar will offer more information, and the chance to ask questions to Barbara or me.

Register for the webinar here.

Or, if you just want to cut to the chase? Contact us.


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