Ask any employment law attorney this question, and you’re bound to receive the answer dreaded by clients everywhere… it depends. Over the past several decades, more and more employers have implemented employee health promotion and disease prevention programs, commonly referred to as wellness programs. Wellness programs can take a variety of forms, from smoking cessation initiatives to biometric screenings to onsite exercise facilities. But, navigating the federal statutes applicable to wellness programs can be difficult for employers.

If employers’ wellness programs include health or medical questions or examinations, employers should carefully consider the following statutes:

  • The Americans with Disabilities Act (“ADA”), which prohibits employers from making disability-related inquiries or requiring medical examinations except as part of a voluntary wellness program.
  • The Genetic Information Nondiscrimination Act (“GINA”), which prohibits employers from requesting genetic information except as part of a voluntary wellness program.
  • The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which prohibits discrimination against plan participants based on a health factor, but which permits premium discounts and other cost-sharing incentives to encourage participation in wellness programs.

The ADA and GINA do not define what constitutes a “voluntary” wellness program. However, implementing regulations issued by the Equal Employment Opportunity Commission (“EEOC”) generally define a “voluntary” wellness program as a program in which an employer neither requires participation nor penalizes employees who do not participate. This definition has created confusion for employers. HIPAA regulations permit incentives to encourage participation in certain wellness programs that are part of a group health plan, while ADA and GINA regulations suggest incentives to participate are not permitted.

In 2016, the EEOC attempted to provide clarification to employers by amending ADA and GINA regulations to clarify that a wellness program could still be permissibly “voluntary” if the incentives offered by employers to participate did not exceed 30 percent of the total cost of self-only coverage (the same maximum incentive limit established for group health plans under HIPAA). Shortly thereafter, a lawsuit was filed against the EEOC claiming the new regulations were inconsistent with the ADA and GINA because employees would feel involuntarily coerced to disclose medical information in order to receive the reward or avoid the penalty. The court agreed and ultimately vacated the new incentive section of the ADA and GINA regulations. 

Therefore, in early 2021, the EEOC produced new proposed regulations to the ADA and GINA that would allow employers to offer no more than de minimis incentives to encourage participation in wellness programs that involved health or medical questions or examinations. The proposed regulations also created a safe harbor for health-contingent wellness programs that are part of group health plans, which would allow greater incentives to be provided in connection with such programs in compliance with HIPAA. 

On January 20, 2021, the EEOC encountered another delay in its effort to provide clarification on wellness program incentives. Following the transition to the Biden administration, the proposed rules were withdrawn from submission for publication in the Federal Register and are on hold until they can be further reviewed under the new administration. Nevertheless, the proposed rules did give some indication that, for purposes of compliance with the ADA and GINA, the EEOC will likely look with disfavor on a wellness program that provides more than a de minimis incentive to participate in the program. Thus, employers should continue to carefully monitor the type of wellness programs they offer to employees. If employers’ wellness programs involve health or medical questions or examinations, employers should be especially cautious in offering any incentive to employees to participate in the programs.

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Davenport, Evans, Hurwitz & Smith, LLP, located in Sioux Falls, South Dakota, is one of the State’s largest law firms. The firm’s attorneys provide business and litigation counsel to individuals and corporate clients in a variety of practice areas. For more information about Davenport Evans, visit