HR News, Human Resources

COVID Vaccine Incentives Complicated by ADA

Hey Compliance Warriors!

Employers are wanting to provide incentives to employees in order to get more folks on board with the COVID vaccine. But, can they really do this without a hitch? Read on…

EEOC’s New ADA Regulations Could Complicate Employer Plans’ Efforts to Offer Incentives for Getting the COVID Vaccine as Part of a Wellness Program


As COVID-19 vaccines become more readily available in coming months, employers are exploring ways to maximize vaccination rates within their workforce.  Some employers are  considering making vaccination mandatory.  Be sure to read our alert for more relating to legal considerations involved with a mandatory vaccination program.  Other employers are considering simply encouraging employees to get vaccinated, offering a voluntary vaccination program, or even offering an incentive to employees who receive the vaccine as part of a workplace wellness program.  Employers should be aware of the existing (and recently proposed) Americans with Disabilities Act (ADA) guidelines that may impact the design of any such program. 

Background – ADA Restrictions on Wellness Programs

As described in greater detail here, the ADA applies to employer-sponsored wellness programs that include a medical exam or disability-related inquiry.  The ADA generally permits employers to make medical examinations or inquiries in connection with a wellness program, but only if such program is “voluntary.”  Under EEOC guidelines, that means:

    • The program is reasonably designed to promote health or prevent disease, is not overly burdensome, and is not a subterfuge for discrimination.
    • The program is not a “gateway plan”, requiring employees to submit to a medical exam or inquiry in order to access an enhanced benefits package.
    • The program offers a reasonable accommodation to persons for whom it is medically inadvisable to participate
    • Participants are provided with a notice informing them of why their information is being requested, how it will be used, and how it will be protected.
    • Incentives are limited.

The final requirement, relating to the level of permitted incentives, is in a state of flux.  Until 2016, there were no guidelines on how much of an incentive could be offered to encourage participation in a wellness program.  In 2016, however, the EEOC finalized regulations that would permit an incentive of up to 30% of the cost of self-only coverage under the employer’s health plan.  Those regulations were challenged by the AARP, however, and were ultimately struck down by the District Court who ordered the EEOC to reissue guidelines that engage in a more thorough process detailing how it determined that the incentive level met the ADA’s voluntary standard. 

Last week, the EEOC issued a Notice of Proposed Rulemaking that would limit any incentives offered in a connection with a participation-only wellness program (i.e., one where participants are simply required to submit to a medical exam or inquiry but not required to achieve any particular outcome) to a “de minimis” threshold.  Examples of permissible incentives in the proposed regulations included a water bottle or a gift card of modest value. 

Analysis of ADA’s Applicability to a Vaccination Program

The EEOC updated its Technical Assistance document on December 16, 2020, to provide that  the administration of a vaccine, in and of itself, does not constitute a medical examination.  That said, vaccine administration is almost always accompanied by medical questions to ascertain whether the person is susceptible to an allergic reaction, etc.  That type of inquiry could constitute a disability-related inquiry and therefore would be subject to restrictions under the ADA if the information is solicited by the employer or by an entity administering the vaccine to employees pursuant to a contract with the employer. 

However, the ADA can be avoided altogether if the employee gets vaccinated by a third party provider who is not under a contract with the employer to administer the vaccine because the medical pre-screening questions are not attributed to the employer under this scenario.  Thus, an employer could structure its wellness program to provide a financial incentive to participants to receive a vaccine from a third-party vendor, not under contract with the employer (e.g., a local pharmacy chain), without running afoul of the ADA.  While the employer could require proof that the individual received a vaccination, that should not trigger ADA restrictions because, as noted above, vaccination status is not, in and of itself, a medical examination or inquiry under the ADA. 

Duty to Accommodate

Current EEOC regulations on wellness programs require accommodation for disabilities absent undue hardship.  Although the proposed regulations on wellness programs do not address accommodations on the basis of religion, presumably the EEOC’s position on accommodation would be the same and the language from the current regulations regarding accommodation remains unchanged.  While current EEOC regulations do not specify what type of accommodation must be offered in a vaccination scenario, presumably the employer would have to come up with an accommodation that is an alternative requirement to getting the vaccine, such as wearing a mask, getting weekly COVID tests and social distancing, so the person with the disability-related or religious objection can earn the incentive. 

Of course, the duty to accommodate would generally only be implicated in situations where an individual is actually unable to get the vaccine due to a disability (or potentially a bona fide religious objection) and reasonable accommodation need only be made absent undue hardship.  The viability of any such claim may be impacted by what the FDA says about any vaccine it approves in terms of any medical contraindication. 

Level of Permitted Incentive

At present, it is unclear what level of incentive would be considered voluntary under ADA guidelines.  Prior regulations permitting incentives up to 30% of the cost of health coverage were invalidated by the courts.  The newly proposed regulations only permitting de minimis incentives are in proposed form, and the EEOC has stated that they are “simply proposals and they do not change the law or regulations.”  Further, there’s a possibility these regulations could be frozen by the incoming Biden Administration and/or revised before taking final form.  In any event, it’s unlikely the regulations would be finalized before more broad-based vaccine rollouts take place.    

Even so, there is some risk that a plaintiff could seize upon this proposed regulations to argue that any incentive that exceeds a de minimis threshold is involuntary.  To be clear, the current regulations are only in proposed form and, as noted, the EEOC has made clear it is not “law.”  Further, courts can defer to, but often do not follow EEOC regulations.  But, employers should keep this proposal in mind as they implement an incentive-based COVID vaccination program.

Be Audit-Secure™

Lisa Smith, SPHR, SHRM-SCP


Lisa Smith is CEO of Andere Corporation and Chief Content Developer at HelpDeskSuites.com. Follow her on Twitter, connect with her on LinkedIn, listen to her Small Business Spoonfuls Podcast, and find more in her Compliance Warriors Facebook Group.

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