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Employee Health Penalties

Meaning

Employee Health Penalties are financial or non-financial disincentives imposed on employees who fail to meet specific health standards or decline to participate in certain components of a workplace wellness program, particularly those that are health-contingent. These penalties, which may include higher insurance premiums, reduced employer contributions to health savings accounts, or loss of access to specific benefits, are designed to encourage compliance but must remain compliant with regulatory limits, such as those set by HIPAA and the EEOC. Excessive penalties can be deemed coercive, violating the principle of voluntary participation.