Monday, August 28, 2017

EEOC Must Reconsider Rules On Workplace Wellness Programs

Last week, the U.S. District Court for the District of Columbia handed the Equal Employment Opportunity Commission (EEOC) some bad news on two of the commission’s rules on workforce wellness programs. While the federal judge allowed the rules to stay in place (for now), in order to avoid “potentially widespread disruption and confusion,” the court found that the rules were arbitrary.

Last October, the AARP challenged the rules that allowed employers to increase premium contributions up to 30% of individual coverage for employees who refused to participate in wellness programs by disclosing their medical or genetic information. AARP claimed that these rules allowed employers to illegally access private health information by financial coercion and potentially use that data in a discriminatory manner. The AARP argued the 30 percent incentive was inconsistent with the ADA and GINA requirement that the incentives are voluntary.

The District Court sided with the AARP by stating that “neither the final rules nor the administrative record contain any concrete data, studies, or analysis that would support any particular incentive level as the threshold past which an incentive becomes involuntary in violation of the ADA and GINA.”

The decision was with reservation as to vacating the EEOC rules because of the potential repercussions for those who already receive these incentives. The opinion states, “[e]mployees who received incentives from their employers would presumably be obligated to pay these back, which may not be feasible for many.” On the other hand, “employers who imposed a penalty rather than an incentive would likewise be obligated to repay to employees the cost of the penalty, which again, may or may not be feasible.”

The District Court noted that the confidential information that has been disclosed cannot be undisclosed and expressed concern about making potential health plans illegal. The AARP wants the regulations to comply with the ADA and GINA, while also protecting employees against discrimination. The decision addresses concerns from both parties and the EEOC will have to determine how to best comply in order to appease the District Court. If this is decided in favor of AARP, the regulations will need to be redrafted.

This decision, the first which addresses the overall legality of a 30% incentive/penalty for disclosure of ADA and GINA protected information, does not yet change employers’ rights in Illinois.  Although the EEOC said it will appeal the D. C. Circuit opinion, it does signal that the regulations are likely to change in the future. We’ll keep you updated.