April 20, 2021

Volume XI, Number 110

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April 20, 2021

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April 19, 2021

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EEOC Withdraws Proposed Wellness Incentive Rules — Increasing Employer COVID-19 Vaccination Incentive Uncertainties

We previously discussed the EEOC’s proposed new wellness program incentive rules under the ADA and GINA in our post, How Big Can the Carrot Be?  The proposed rules were to replace the EEOC’s previous “health-contingent” wellness program regulations, which had been struck down by the U.S. District Court for the District of Columbia because they allegedly permitted large incentives that the court found were essentially coercive and thus in violation of the ADA and GINA proscriptions permitting only voluntary disclosures of disability or genetic-related information (absent a business necessity).  The proposed regulations were issued pursuant to a 3-2 EEOC Commissioner’s vote shortly before the end of the Trump Administration, but had not been published in the Federal Register let alone completed the adoption process.  Now as part of the Biden Administration’s regulatory freeze, the EEOC has withdrawn them.

EEOC’s withdrawal of the proposed rules returns employers to the unhelpful status quo that existed prior to January 2021 with no regulatory guidance regarding how large an incentive is too large to meet the ADA and GINA voluntariness requirements with respect to health-contingent wellness programs incentives.  While the HIPAA wellness program rules remain in effect and may be relied upon for compliance with HIPAA, such HIPAA compliance does not assure that wellness program incentives would comply with the ADA and GINA.

One of the EEOC Commissioners, Keith Sonderling (a Trump appointee), stated in an interview on February 18, 2021, that the rules remain under consideration at EEOC and that employers should “stay tuned.”  Commissioner Sunderling did acknowledge that all stakeholders want clarity on the issue of incentives and suggested that EEOC will work to address the issue.

The incentive issue has particular currency and importance today as many employers consider whether to offer incentives to encourage employees to receive COVID-19 vaccinations.  It is unknown, however, when the EEOC will re-propose any incentive regulations; moreover, as a practical matter final adoption of any proposal could not be completed during the time when employers will be considering COVID vaccination incentives because the EEOC must provide a 60-day notice and comment period for any new proposed regulation and then must consider all comments submitted and whether any changes should be made to the proposed regulations before, finally, submitting the final regulation for publication in the Federal Register.

Thus, for now, employers will have to proceed on the issue of vaccination and other wellness program incentives without EEOC guidance.  Given this regulatory uncertainty, prudent employers should carefully consider the nature and value of any vaccination incentives if such incentives could be deemed a part of a health-contingent employee wellness program or otherwise subject to the ADA and GINA and should consider seeking appropriate advice of counsel.

 

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©2021 Epstein Becker & Green, P.C. All rights reserved.National Law Review, Volume XI, Number 56
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About this Author

Frank Morris, Health Care Attorney, Epstein Becker Law Firm
Member of the Firm

FRANK C. MORRIS, JR., is a Member of the Firm in the Litigation and Employee Benefits practices, heads the Labor and Employment practice in the Washington, DC, office, and co-chairs the firm's ADA and Public Accommodations Group.

Mr. Morris' experience includes:

  • Advising clients on and litigating employment, labor, disabilities, non-compete, confidentiality, benefits, information access and privacy, wage and hour, and general litigation matters in state and federal courts and administrative agencies...

202-861-1880
Member of the Firm

TZVIA FEIERTAG is a Member of the Firm in the Employee Benefits & Executive Compensation practice, in the Newark office of Epstein Becker Green. She has worked exclusively in the area of employee benefits for more than 16 years, advising employers of all sizes, including Fortune 500 companies, other public and private companies, and start-ups, on all aspects of ERISA compliance and the day-to-day operation of employee benefit plans.

Specifically, Ms. Feiertag’s experience includes:

  • ...

973-639-8270
Maxine Neuhauser, EpsteinBeckerGreen, Life Science, Employment, Health Care
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MAXINE NEUHAUSER is a Member of the Firm in the Labor and Employment and Health Care and Life Sciences practices, in the Newark office of Epstein Becker Green. Her practice focuses on litigation and providing strategic advice and counsel to regional, national, and international corporations, in multiple areas of law, including labor and employment, intellectual property and non-competes, and health. Ms. Neuhauser has represented clients in numerous, diverse industries, including financial services, aviation, managed care, life sciences, and retail. She also represents...

973-639-8269
Jennifer Barna Employment Lawyer Epstein Becker

JENNIFER STEFANICK BARNA is a Senior Counsel in the Employment, Labor & Workforce Management and Litigation practices, in the firm's Newark office. Her practice focuses on civil litigation and corporate counseling in the areas of employment law and complex commercial matters. Ms. Barna represents businesses in a broad spectrum of industries, including commercial real estate, financial services, health care, and retail.

Ms. Barna's experience includes:

  • Representing employers in state and federal...
973-639-5232
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