Court to the Equal Employment Opportunity Commission: “Try Again” on Wellness Rules

In October 2016, the American Association of Retired Persons (AARP) sued the US Equal Employment Opportunity Commission (EEOC) in the US District Court for the District of Columbia seeking an injunction against the latest iteration of wellness program regulations. The final EEOC regulations issued last year offer employers a roadmap for offering employee wellness programs that pass muster as “voluntary” examinations under the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act of 2008 (GINA). In response, AARP argued that the EEOC failed to adequately justify the new rules and abused its regulatory power by reversing course on its long-standing position against wellness programs.

This week, in yet another twist in the long and winding road of wellness program rules, the DC District Court agreed with AARP. The DC District court declined to vacate the regulations and instead ordered the EEOC to revisit the regulations, reasoning that that an abrupt change in the law would cause wide-spread disruption for employer-sponsored wellness programs. Key points in the DC District Court’s opinion include:

• EEOC wellness regulations defined the 30 percent cap on incentives differently from the HIPAA definition of the 30 percent incentive cap.

• The incongruity between the Health Insurance Portability and Accountability Act of 1996 (HIPAA) wellness regulations and the EEOC wellness regulations has caused plan sponsors confusion and additional issues in administering wellness programs as wellness programs must be analyzed under both HIPAA and EEOC regulations for compliance.

• The DC District Court found nothing in the EEOC’s administrative record that explains the agency’s conclusion that a 30 percent incentive level is the appropriate measure for voluntariness.

While the EEOC reviews and responds to the DC District Court’s decision, the current EEOC wellness regulations remain in effect. McDermott’s Health and Welfare practice will closely monitor any further developments and provide additional guidance as it becomes available. In the interim, employers should have each modification to their wellness programs reviewed for compliance under both the EEOC regulations and the HIPAA regulations.