U.S. employers can reward workers with as much 30 percent of the cost of their health insurance benefits in return for participation in programs to monitor weight, cholesterol and other “wellness” measures, the Obama administration said Thursday.
Honeywell International Inc., for example, has given employees incentives worth as much as $3,500 to track health measures like body mass index and heart health.
Many other employers have similar programs, though there has been debate over how far they can go.
While the Patient Protection and Affordable Care Act allowed employers to increase financial incentives for employee participation, the Equal Employment Opportunity Commission under President Barack Obama has sued companies, including Honeywell, arguing that they violated the Americans with Disabilities Act.
The proposed regulations issued today by the EEOC are intended to reconcile the two laws. The rule “makes clear that wellness programs are permitted under the ADA, but that they may not be used to discriminate based on disability,” the EEOC said in a statement.
Employers have struggled to make sense of a divide between federal agencies over the issue and were pleased with the announcement.
“The EEOC has removed the cloud of uncertainty,” said Steve Wojcik, vice president of public policy at the Washington-based National Business Group on Health. The group represents large employers.
While almost unheard of five years ago, more than a third of U.S. employers now charge their workers a penalty that averages about $50 a month if they don’t participate in wellness programs, according to benefits firm Towers Watson & Co. Some companies charge as much as $1,600 a year to employees who refuse.
Those penalties typically come in the form of higher health insurance costs. The average premium for a single worker at a U.S. employer was $6,025 in 2014, according to the Kaiser Family Foundation, a Menlo Park, California, nonprofit that researches health issues.