Fundamentals
You are asking a question that touches upon a deeply personal space the intersection of your health, your privacy, and your employment. The feeling of being required to share biological data to receive a benefit is a valid concern. At its heart, the answer revolves around the principle of genuine choice.
A wellness program can offer a reward for submitting to a biometric screening, but the process must be truly voluntary. This means the incentive should act as a gentle encouragement, not a financial pressure that feels impossible to refuse.
Think of your body’s health data as a private conversation. The law, specifically the Americans with Disabilities Act (ADA), recognizes the sanctity of this conversation. The ADA generally prohibits your employer from asking you to undergo a medical examination, which a biometric screening is considered to be.
There is, however, an important exception for employee health programs, provided your participation is completely voluntary. The core of the issue lies in defining what “voluntary” truly means when a financial reward is attached.
The Concept of Voluntariness
For your participation to be considered voluntary, you must have a real opportunity to choose whether or not to provide your health information. You cannot be required to participate, nor can you be denied health coverage or be fired for refusing the screening. The program must be reasonably designed to promote health or prevent disease; it cannot be a subterfuge to simply collect data or discriminate.
The legality of a wellness program’s biometric screening hinges on whether the associated reward is a true incentive or a coercive penalty in disguise.
An employer must also provide a clear notice explaining what information will be collected, who will see it, how it will be used, and how it will be kept confidential. This transparency is a cornerstone of a lawful program, allowing you to make an informed decision about your participation. Your personal health data, once collected, is protected by strict confidentiality rules, preventing it from being used for any discriminatory purposes.
Intermediate
To understand the legal intricacies of wellness program incentives, we must examine the interplay of several federal laws. While the Health Insurance Portability and Accountability Act (HIPAA), as amended by the Affordable Care Act (ACA), provides a framework for wellness incentives, the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA) impose critical anti-discrimination protections that create a more complex regulatory environment.
HIPAA and the ACA differentiate between two primary types of wellness programs. Understanding this distinction is the first step in the analysis.
- Participatory Programs These are generally available to all employees without regard to health status. A reward might be given for simply attending a health seminar or completing a health risk assessment, without any requirement to achieve a specific health outcome. Biometric screenings where the reward is given for participation alone fall into this category.
- Health-Contingent Programs These require you to meet a specific health-related standard to earn a reward. They are further divided into activity-only programs (e.g. walking a certain number of steps) and outcome-based programs (e.g. achieving a target cholesterol level).
Under HIPAA and the ACA, health-contingent programs can offer incentives of up to 30% of the total cost of health coverage (or 50% for programs designed to prevent or reduce tobacco use). This seems straightforward, but this is where the legal tension arises.
The ADA and GINA view biometric screenings and health questionnaires as medical inquiries that are only permissible if they are part of a voluntary program. The central conflict is that a 30% incentive, while permissible under HIPAA, could be viewed as coercive under the ADA, thus rendering the program involuntary.
The Rise and Fall of the EEOCs Incentive Limit
The Equal Employment Opportunity Commission (EEOC), the agency that enforces the ADA and GINA, attempted to resolve this conflict. In 2016, it issued regulations that harmonized with HIPAA, stating that an incentive up to 30% of the cost of self-only health coverage would not be considered coercive. This created a clear “safe harbor” for employers.
However, this rule was challenged in court by the AARP in the case AARP v. EEOC. The AARP argued that a 30% penalty could amount to thousands of dollars for some employees, making participation a financial necessity rather than a voluntary choice. The court agreed, finding that the EEOC had not provided a reasoned justification for why the 30% threshold ensured voluntariness. As a result, the court vacated the EEOC’s incentive rule effective January 1, 2019.
The vacating of the EEOC’s 30% incentive rule removed the clear legal safe harbor, creating a period of regulatory uncertainty for employers.
What Is the Current Legal Standard for Incentives?
Following the court’s decision, the EEOC proposed new rules in early 2021 that would have dramatically lowered the allowable incentive to a “de minimis” level, such as a water bottle or a gift card of modest value. However, these proposed rules were withdrawn by the new administration and never took effect.
This sequence of events leaves employers and employees in a legal vacuum. There is currently no specific federal regulation defining what size incentive is permissible under the ADA and GINA. The core requirement of the ADA remains participation must be voluntary. Without a clear financial threshold, the legality of an incentive is determined by a more holistic assessment of whether it is so substantial that it effectively compels participation.
| Period | Governing Rule | Incentive Limit Under ADA/GINA |
|---|---|---|
| 2016-2018 | EEOC Final Rule | Up to 30% of the cost of self-only health coverage |
| 2019-Present | Post-AARP v. EEOC Ruling | No specific regulatory limit; voluntariness is assessed on a case-by-case basis |
Academic
The central jurisprudential issue concerning mandatory biometric screenings in wellness programs resides in the statutory tension between public health objectives, as encouraged by HIPAA and the ACA, and the anti-discrimination mandates of the ADA and GINA. A biometric screening is unequivocally a “medical examination” under the ADA’s definition.
As such, Section 12112(d)(4)(A) of the ADA prohibits employers from requiring such examinations unless they are job-related and consistent with business necessity. The crucial exception, found in Section 12112(d)(4)(B), permits voluntary medical examinations that are part of an employee health program. The entire legal analysis, therefore, pivots on the interpretation of “voluntary.”
The Judicial Scrutiny of Agency Interpretation
The AARP v. EEOC case provides a compelling study in administrative law and the limits of agency deference. The D.C. District Court’s decision to vacate the EEOC’s 2016 rule was grounded in the Administrative Procedure Act (APA).
The court concluded that the EEOC’s adoption of the 30% incentive threshold from HIPAA was arbitrary and capricious because the agency failed to provide a reasoned analysis of how that figure aligned with the protective, anti-discriminatory purpose of the ADA.
HIPAA’s purpose is to regulate insurance and facilitate health-contingent programs, whereas the ADA’s purpose is to prevent discrimination based on disability. The court determined that the EEOC could not simply borrow a standard from one statute to define a key term in another without an independent, evidence-based justification.
This judicial action underscores a critical principle the meaning of “voluntary” must be construed within the context of the statute in which it appears. For the ADA, this means the choice to participate must be free from economic duress that could lead an employee to unwillingly disclose disability-related information.
What Constitutes Economic Coercion in This Context?
In the absence of a regulatory safe harbor, the analysis of whether an incentive is coercive becomes a fact-specific inquiry. Legal scholars and courts must now consider a multifactorial approach. A key concern, highlighted in the AARP litigation, is the disparate impact of a uniform incentive on a heterogeneous workforce.
A financial penalty that is trivial to a high-income employee may be powerfully coercive to a low-wage worker, potentially leading to a disproportionate impact on individuals with disabilities, who are statistically more likely to have lower incomes.
The absence of a defined incentive limit shifts the legal analysis to a case-by-case determination of whether a program is coercive.
Any future regulatory action by the EEOC will likely need to incorporate an economic analysis demonstrating how a proposed incentive limit avoids this coercive effect across different income levels. The withdrawal of the 2021 proposed “de minimis” rule suggests a recognition of the practical difficulties in setting a standard that is both meaningful as an incentive and non-coercive as a mandate.
| Statute | Primary Purpose | Application to Biometric Screenings |
|---|---|---|
| ADA | Prohibit discrimination based on disability. | Permits screenings only if part of a “voluntary” employee health program. |
| GINA | Prohibit discrimination based on genetic information. | Restricts acquisition of genetic information, with a similar “voluntary” exception. |
| HIPAA / ACA | Regulate health insurance and promote preventive care. | Allows financial incentives (up to 30-50% of coverage cost) for health-contingent programs. |
The current legal environment is characterized by uncertainty. Employers must navigate this by carefully weighing the incentive value against the risk of a legal challenge. Prudent legal counsel would likely advise that the smaller the incentive, the lower the risk that it will be deemed involuntary, effectively pushing employers toward the “de minimis” standard that was proposed but never finalized.
References
- U.S. Equal Employment Opportunity Commission. “Proposed Rule on Wellness Programs under the Americans with Disabilities Act.” Federal Register, vol. 86, no. 10, 15 Jan. 2021, pp. 3815-3831.
- U.S. Equal Employment Opportunity Commission. “Withdrawal of Notices of Proposed Rulemaking.” Federal Register, vol. 86, no. 37, 26 Feb. 2021, pp. 11665-11666.
- AARP v. U.S. Equal Employment Opportunity Commission, 267 F. Supp. 3d 14 (D.D.C. 2017).
- Roberts, Jessica L. “The Genetic Information Nondiscrimination Act as an Antidiscrimination Law.” Notre Dame Law Review, vol. 86, no. 2, 2011, pp. 597-646.
- Houtenville, Andrew J. and W. Erickson. “Disability Statistics from the 2019 American Community Survey (ACS).” Institute on Disability, University of New Hampshire, 2020.
Reflection
Your Health Your Decision
The information presented here maps the complex legal terrain surrounding your personal health data in the workplace. Understanding these rules is a form of empowerment. It transforms a moment of potential pressure into one of informed choice. Your health journey is uniquely your own, and the decision to share its details is a significant one.
The law provides a framework, but the ultimate authority rests with you. This knowledge is the first step in advocating for your own privacy and well-being, ensuring that your participation in any wellness initiative is a true partnership, not a mandate.
