EEOC Proposed Regulations May Require Revisions to Your Tobacco Prevention Wellness Program

In our April 21 blog, Wellness Programs: Agencies Issue Helpful Guidance but Look Before You Leap, Nancy Campbell wrote about the release of the much-anticipated EEOC proposed regulations concerning wellness programs.  In her blog, Nancy briefly touched upon some of the differences between the EEOC proposed regulations and the final HIPAA wellness regulations issued by the Departments of Treasury, Labor, and Health and Human Services on June 3, 2013.

One of the most noteworthy differences between the two regulations is the treatment of the maximum permissible reward that employers can offer to employees under wellness programs designed to prevent or reduce tobacco use.  The final HIPAA regulations allow for a total reward of up to 50% of the employee’s total cost of coverage under a wellness program aimed at tobacco cessation, whereas other wellness programs (i.e., those programs not aimed at tobacco cessation) have a maximum reward of up to 30% of the employee’s total cost of coverage.

The EEOC proposed regulations establish a 30% maximum reward for all wellness programs. Unlike the final HIPAA regulations, the EEOC proposed regulations do not permit a higher amount for wellness programs designed to reduce or prevent tobacco use.  However, importantly, the EEOC proposed regulations only apply to wellness programs that include disability-related inquiries or “medical examinations.”  Accordingly, employers may still offer a 50% reward under a wellness program aimed at tobacco cessation if the wellness program does not include a “medical examination,” because this type of wellness program would be outside the scope of the EEOC proposed regulations.  In an EEOC Q&A addressing when employers may obtain medical information about their employees under the Americans with Disabilities Act, the EEOC defined a “medical examination” as “a procedure or test usually given by a health care professional or in a medical setting that seeks information about an individual’s physical or mental impairments or health.”  The definition generally includes blood and urine tests.

While not expressly stated in the EEOC proposed regulations, based on the definition provided in the Q&A, the 30% maximum reward likely applies to tobacco-cessation wellness programs that detect tobacco use by blood or urine tests.  It may also apply to tobacco-cessation wellness programs that use saliva swabs or hair testing to confirm tobacco use.  Employers that want to continue to offer a 50% reward may have to rely on employee attestations that the employee is not using any tobacco products rather than medical testing.

Another noteworthy difference between these regulations is the calculation of the maximum reward for employees who elect family coverage and have family members participate in the wellness program.  The EEOC proposed regulations impose a maximum reward of 30% of the total cost of employee-only coverage, even if the employee enrolls in family coverage and the employee’s family members participate in the wellness program.  In contrast, the final HIPAA regulations permit, when an employee elects family coverage and the employee’s family members participate in the wellness program, a maximum reward of 30% (or 50% for tobacco-cessation programs) of the total cost of coverage, including the costs attributable to the family members.

Comments are due on or before June 19, 2015.  Hopefully, the final EEOC regulations will better align with the final HIPAA regulations.