The number of employee wellness programs are increasing nationwide, and a new federal rule has clarified the rewards and penalties that companies can offer to get workers to participate.

One example: The wellness programs offered by Vitality USA have doubled in number over the last three years, said Tal Gilbert, the company's CEO, and “employers are becoming more sophisticated and comprehensive in what they cover.”

Recently, Vitality announced an alliance with Apple in which participating client employees and John Hancock insurance policy holders can earn an Apple Watch Series 2 for just $25 by accumulating points earned exercising.

“A few years ago, a wellness program may have involved completing an online questionnaire and annual check up, whereas now they encompass innovative programming to help workers make healthier food and exercise choices,” Gilbert told Financial Advisor magazine.

Critics of wellness programs say the questionnaires and assessments are an invasion of privacy. In May, the Equal Employment Opportunity Commission (EEOC) finalized a rule that allows programs to ask medical questions and include limited incentives -- rewards or penalties -- for employees who participate, but the programs must be voluntary.

Gilbert says Vitality's questionnaire addresses issues such as health habits, activity and stress levels, and a clinician completes biometric screenings on participants. A biometric screening measures physical characteristics, such as height, weight, body mass index, blood pressure, blood cholesterol, blood glucose and aerobic fitness, says The Centers for Disease Control and Prevention. A participant in Vitality's program does not necessarily need to release medical data. "Within our program, an employee can still participate in other ways without sharing medical information if they didn’t want to,” he said.

Under the EEOC rule, wellness programs can assess penalties or give rewards of up to 30 percent of the total cost of a participant's premium in an individual health insurance plan. The incentive can be up to 50 percent to prevent or reduce tobacco use.

Lately, employers are reportedly re-thinking their well-being programs and incentives for them, according to Dr. Jeff Levin-Scherz, north American leader of health management with Willis Towers Watson in Boston.

Some 70 percent of U.S. employers now state that they focus on direct incentives for healthy behavior, and one-third fewer employers expect this to be the case by 2018, according to 2016 findings by Willis Towers Watson called Improving Workforce Health and Productivity, Staying@Work. About a third of employers now focus on workplace health and culture and they report this will almost double in the next three years.  

"Relatively few employers use penalties except for tobacco cessation, Levin-Scherz told Financial Advisor. “Most employers express incentives as a reward rather than a penalty.”