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A Legal Challenge to the EEOC's Wellness Regulations

face-984031_640.jpgAARP, the consumer advocacy group that represents older Americans, filed a lawsuit arguing that the proposed wellness programs violate anti-discrimination laws aimed at protecting workers’ medical information. The lawsuit was filed against the Equal Employment Opportunity Commission (EEOC), the federal agency responsible for issuing these wellness rules governing what employers can do. This is a particularly stunning course of events since one of the lawyers for the AARP was quoted in an interview as stating “we are virtually always allies with the EEOC.”


AARP's Stance

AARP is seeking a preliminary injunction that would keep the EEOC’s final wellness regulations from going into effect on January 1.  AARP asserts that the EEOC’s final rules did not go far enough to avoid compelling participation. AARP also asserts that the incentives permitted (limited to 30% of the annual cost of a worker’s health insurance coverage) by the final rules “enable employers to pressure employees to divulge their own confidential health information and the confidential genetic information of their spouses as part of an employee ‘wellness’ program.” The complaint further alleges that the final rules are “contrary with Congressional intent and that the EEOC did not adequately justify the standard for voluntariness in its final rule”.

Wellness Programs

The EEOC issued final rules in May 2016, which limited what and how an employer may offer incentives to its employees who participate in a wellness program without violating the Americans with Disabilities Act (ADA) or the Genetic Information Nondiscrimination Act (GINA). Under the Affordable Care Act, employers can use financial incentives to entice employees to participate in these programs. The thought process is that wellness programs allow an employer to take control of their health costs with the overall result of reducing health care costs.

Therein lies the rub. 

On one hand wellness programs are viewed favorably by a segment of employees since they can result in an attractive financial incentive dependent on the level of participation by the employee and in some programs, his/her spouse. However there is also the group of employees who are resistant about sharing that information with employers either because they think employers should not know every aspect of their lives, they value their privacy, or even because they think “they are living under the grid”.  More importantly and for purposes of this lawsuit, AARP asserts that employers can use this medical and genetic information in a discriminatory manner.

The final rules were intended to put to rest the ambiguity between a permissible incentive to participate in a wellness program and an impermissible penalty for not participating in the program. So much for that.

The Kaiser Family Foundation has stated that the cost of individual coverage averages $6,435 a year.  Using the 30% incentive cap, that means an employee who refuses to participate could cost workers nearly $2,000. AARP asserts that the EEOC has reversed its longstanding position to protect employees’ privacy. AARP further states that people would have to either incur significant financial penalties by not participating in wellness programs or they will have to divulge medical information that “once revealed, will never be confidential again.”

Final Thoughts

Personally speaking, while I am not a fan of the 30% cap on wellness programs, I do think that AARP is making several “reaches” with their arguments in this lawsuit. AARP argues that employers who offer wellness programs that ask for medical information should be truly voluntary. What that means is that if an employee refuses to disclose information or refuses to participate in a test, he/she should still be compensated. The bottom line is that if AARP is successful, your wellness program may again be impacted whether it involves premium discounts, incentives, and prizes for participating in health risk assessments and screenings.

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