The EEOC put two lumps of coal in the wellness industry’s Festivus stocking late yesterday (12/20/18). One was expected. The other – likely delaying new wellness rules to 2020 or 2021 – was out of the blue.
EEOC Rule Officially Ends “Safe Harbor” for Wellness Incentives
They made it official in the Federal Register. The EEOC’s “final rule” is now published. The Federal Register provides this information (with the boldface ours):
On August 22, 2017, the District Court concluded that the Commission did not provide sufficient reasoning to justify the incentive limit adopted in the GINA rule and remanded the rule to the EEOC for further consideration without vacating it. Following a motion by Start Printed Page 65297AARP to alter or amend the court's summary judgment order, the court issued an order vacating the incentive section of the rule, 29 CFR 1635.8(b)(2)(iii), effective January 1, 2019. AARP v. EEOC, D.D.C., No. 16-2113 (D.D.C. Dec. 20, 2017). Consistent with that decision, this rule removes the incentive section of the GINA regulations at 29 CFR 1635.8(b)(2)(iii).
In other words, there is no more “safe harbor” protection for highly incentivized or penalized clinical wellness programs which are pitched to employees as “voluntary” but carry significant financial penalties for non-participation or failure to lose weight.
This rule change has been anticipated and addressed by some, but there has been continuing denial by others. One recent article noted: "The advice employers are receiving from benefit consultants ranges widely, from ‘drop all incentives and penalties’ to ‘stay the course.'"
Quizzify was never in denial. Quite the contrary, Quizzify accurately predicted the demise of this rule a year ago following the AARP v. EEOC decision, and immediately set up an elegant workaround, to turn this vacatur lemon into lemonade. No need to drop incentives or penalties, using this workaround. Everybody wins.
New Wellness Rules Likely Delayed to 2020 or Beyond
President Trump had nominated Daniel Gade for the vacant EEOC commissioner position. The nomination and confirmation process was tortuous, with the end in sight. However, Mr. Gade withdrew his nomination on the eve of Senate consideration, saying: “The process of being confirmed should not be so painful that it causes good people to run away.”
The administration had hoped to fill the position by year-end. However, now the entire nominating process must restart from scratch. In addition to preventing a further “tilt” towards employers in 2019, which Mr. Gade’s appointment was expected to do, the vacancy (and the delay in confirming other nominees) means that the EEOC won’t have a quorum to undertake rule-making. So their latest self-imposed deadline for issuing proposed rules, June 2019, is virtually certain to be missed, as were the previous deadlines of August 2018 and January 2019. Hence the rules themselves won’t be in place likely until well into 2020. Until then, the safest “safe harbor” is the indemnification Quizzify provides.
Further, there is a movement afoot in Congress to significantly limit employers’ ability to attach any penalties (or other differentials) to inappropriate screens, meaning those which are not A-rated or B-rated by the US Preventive Services Task Force. Such a law would severely curtail employers’ ability to screen all employees for many blood values every year, as guidelines recommend against frequent screening for adults with minimal risk factors, due to the potential for harm through overdiagnosis and overtreatment based on false positives.
For the time being, Congressional action is speculation, rather than a firm prediction, but we will share information as we learn it.
Quizzify will do a webinar on these new developments early in 2019.
Missed the previous roundups? Here they are.