EEOC Withdraws New Proposed Wellness Program Regs: COVID-19 Vaccine Incentive Impact, Feb. 25, 2021

Early this year, the EEOC released a new set of regulations that would govern whether employers could permissibly offer certain wellness incentives to employees. Those rules were designed to replace regulations that were vacated by court order in 2018. Under the new regulations, employers would have been permitted to offer certain de minimis incentives to employees who participated in wellness programs, including low value gift cards and other "gifts". However, employers who also offered a health insurance plan in conjunction with the wellness program were permitted to offer incentives valued at up to 30% of the cost of coverage. Importantly, the regulations would have offered guidance for employers interested in offering incentives to employees who received the COVID-19 vaccine--but were withdrawn in February. Those employers should now exercise caution, and be aware of the need to offer reasonable accommodation for religious beliefs or disability (in other words, they may need to provide an alternative way to earn the incentive for employees who will not get the vaccine because of religious beliefs or disability). For more information on de minimis fringe benefits, see Q 8910.