Fed rule to lift hurdle for employee wellness penalties

The Obama administration announced on Thursday that it will propose new rules for workplace wellness programs that would treat programs that penalize workers thousands of dollars for not participating as voluntary (Source: “Obama administration to remove hurdle to 'wellness' penalties,” Reuters, April 16, 2015).

That decision is set to be published in the Federal Register on Monday, opening 60 days for public comment.

The rule would likely remove a legal challenge to the wellness program at Honeywell International Inc. Last year, the Equal Employment Opportunity Commission (EEOC) sued Honeywell, arguing that penalties in its workplace wellness program, which could reach $4,000 a year for workers who chose not to participate, made it involuntary.

The "voluntary" standard also is critical because landmark antidiscrimination laws have largely prohibited employers from asking questions about workers' health unless the queries relate to an individual's ability to perform a job.

Workplace wellness programs, which the vast majority of large U.S. firms have instituted, often require employees to answer detailed questions about their family medical histories and personal health, and to undergo employer-specified medical exams.

The programs have expanded recently because the ACA allows employers to charge non-participants 30 percent more for health coverage, including premiums and deductibles, which can amount to thousands of dollars.