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EEOC wellness program compliance suddenly matters!

Updated: Mar 2

February 12th update: The EEOC's proposed rules are officially dead. New rules, months away, will propose de miminis incentives and penalties only, for clinical programs. No more loopholes, as in the January 7th version. In the absence of rules, the word "voluntary" itself applies.


If your program heavily weighs screens, risk assessments and coaching in incentives or penalties or premium differentials or incentives-in-kind like vacation days, it is out of EEOC compliance, period. Cut to the chase and contact us directly to fix this now.

Until January 16, 2018, employers could safely tie forfeitures as high as 30% of total premiums to “voluntary” wellness programs. This seeming oxymoron reflects the presure from the US Chamber of Commerce and Business Roundtable placed on the EEOC to define the word “voluntary” as “forced."


On that date, a federal Court in AARP v. EEOC "vacated" this 30% safe harbor, effective January 2019, and directed the EEOC to write new rules capping incentives and penalties at “de minimis” levels.


The Court did not distinguish between incentives and penalties because most significant incentives were not the result of corporate largesse. Rather, most large incentives accompanied equally large increases in deductibles, giving employees the “chance to earn back” the difference.


Absent the safe harbor, basically every clinical program has been out of compliance for the last two years, because basically every clinical wellness program still relies on large incentives or penalties to get employees to submit.

Out of compliance…but (almost) no one cared


If the speed limit is 65 mph and everyone is going 75, no one will get a ticket. Likewise, if everyone is equally out of EEOC compliance, no one will get sued.


That is exactly what happened. Noncompliance was business as usual. The EEOC, heavily influenced by those business lobbies, didn’t initiate any suits. They would have been overwhelmed if they had tried, since almost every substantial program was noncompliant.


However, if you drive your red Ferrari 85 in a 65 zone, you’re basically asking for a ticket. And that’s exactly what Yale University did. They levied massive fines on wage-earning support staff for failing to submit. In one case, their wellness vendor threatened one of the named plaintiff employees with a four-figure fine for not getting a mammogram, even though this particular employee a cancer survivor, had already undergone a double mastectomy.


The EEOC didn’t take note, but AARP did, and helped the employees file a suit against the University on July 16, 2019.


Had that lawsuit been decided in favor of the plaintiffs, the entire wellness industry would have been thrown into chaos. But the suit is still pending. Both sides filed for summary judgment more than a year ago…and the chatter surrounding the suit has since died down.


So once again, no one cared. With no EEOC rules and no case law citing the “vacatur” of the previous rules, everyone still drove 75. Enforcement was nil.


The EEOC is about to care


Two years behind schedule, the EEOC announced new rules on January 7. These rules complied with the letter of the AARP v. EEOC decision by all but eliminating incentives for participatory programs. It did cleverly violate the spirit of the law by carving out an employer-friendly loophole for outcomes-based programs.


Those rules were supposed to be open to public comment for 60 days but then three events in two weeks changed everything:

  • January 8-20, 2021: The dog that didn’t bark in the nighttime: The Federal Register did not publish the proposed rules for public comment. The absence of this routine step suggests this rather tortured loophole was apparently already generating blowback.

  • January 21, 2021: The Biden Administration shook up the EEOC, promoted the two Obama appointees, both of whom have strong pro-employee histories, and demoted the Republicans. Same staff, but the power structure is inverted. Imagine Michael G. Scott suddenly having to report to Ryan.

  • January 21, 2021: The Biden Administration froze all proposed rules from every agency from publication for comment in the Federal Register. This indicates a thorough realignment of priorities is in the works.

With no new rules/safe harbor now or on the horizon, noncompliance is no longer a safe bet -- especially with new cops on the beat who want to write tickets.

But wait. There’s more…


Presumably, the judge in AARP v. Yale has been waiting patiently for clarity from the EEOC before ruling. Now he has more clarity than he could ever have hoped for: it is clear that “voluntary” means “voluntary.”


The ruling will likely come down within 2 months, and we are certain enough that the plaintiffs will win that we guarantee it – for a 20% premium, we will double the length of any contract free if the judge rules for the University.

This ruling will generate enough noise to awaken every tort lawyer in America. Only a few will follow through, as federal class action litigation is not for the faint of heart. The more likely risk for you is that your own in-house attorneys will ask why you aren’t already in compliance (since the Safe Harbor has been history for three years) and demand that you become compliant posthaste.

Never has an EEOC compliance problem been so easily solved


We can have you compliant within 24 hours. Quizzify was created knowing that large financial forfeitures for “voluntary” programs were going to be toast someday, and was designed to solve that problem.


Here’s how. If, for example, employees had to complete certain steps in 2020 to comply for 2021, you just send a memo saying that you’ve extended the deadline, Maybe blame the pandemic to avoid establishing a precedent.


Allow completion of X number of Quizzify quizzes, or reaching a certain cumulative quiz score, to qualify them for 2021. As would completion of the other pre-existing activities. (You don’t have to discontinue those. You merely offer Quizzify’s side-by-side.)


You might say: “Sounds good. We’ll offer Quizzify in 2021 to be compliant in 2022.” Well, here’s the news: there is no runway here. The rules for 2022 and 2021 are the same, which is to say, no tortured EEOC interpretation of the ADA’s “voluntary” requirement creating any Safe Harbor for clinical programs. (The EEOC/ADA governs clinical programs only. Activity-based programs are not affected. You can make employees run around the block…but you can’t take their pulse afterwards.)


Compliance is as simple as this poster.

Here’s what else Quizzify offers


As compared to virtually every non-compliant program, Quizzify changes behavior more and engages more. No need to take our word for behavior change. Just play the four-question quiz on the Quizzify home page…and see if your own behavior changes/knowledge increases -- in just five minutes. No need to take our word for engagement either. It’s guaranteed. And for that matter, no need to take our word for compliance, either. Also guaranteed.

We have COVID covered too, with quizzes to reassure employees about vaccine safety, how to stay safe until they are vaccinated, and how to use your own COVID resources. Every other imaginable topic as well, from angina to zoster. 200 questions on nutrition alone. Customizable questions about your own benefits. And, at risk of possibly losing our coveted G rating, women’s health and men’s health.


So today is the day to start complying. Your supervisor, your employees, your in-house counsel, and even your CFO will be glad you did. When was the last time you put a smile on all those faces at all, let alone at the same time?


Contact us below to get started. Or sign up for Monday’s webinar, featuring wellness uber-attorney Barbara Zabawa, to learn more.