The U.S. Equal Employment Opportunity Commission’s (EEOC) regulations on wellness programs took effect January 1, as planned, despite a last-minute attempt to halt them in court.
The rules control how employers implement employee wellness programs under both the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA). Among other things, the rules allow employers to offer participation incentives, up to 30% of the total cost for self-only coverage.
The EEOC issued these rules to clarify what it considered a “voluntary wellness program” permitted by the ADA and GINA and to harmonize its criteria, at least in part, with the wellness program rules issued by other agencies under the Health Insurance Portability and Accountability Act (HIPAA) and Affordable Care Act (ACA).
After the EEOC released the final rules in May 2016, AARP sued, alleging that the 30% allowance would render programs involuntary, in violation of the ADA and GINA. Effectively, the rules allow employers to increase premiums by up to 30% if employees choose not to participate in a wellness program, the organization alleged.
AARP also argued that the rules represent such a change from the EEOC’s previous position that they’re “arbitrary and capricious,” in violation of the Administrative Procedure Act (APA).
The group asked a federal district court judge to enjoin the rules, preventing them from taking effect at the beginning of the new year, until the court could review them on their merits.
Noting that an injunction is “an extraordinary and drastic remedy,” Judge John D. Bates of the U.S. District Court for the District of Columbia denied AARP’s request.
Bates considered several factors: (1) irreparable harm if the rule is not enjoined; (2) AARP’s likelihood of success on the merits; and (3) the balance of harms and the public interest.
None of the factors weighed in AARP’s favor, Bates determined. Nothing in the ADA or GINA seems to foreclose the EEOC’s interpretation, he said. And as for the “arbitrary and capricious” argument, AARP failed to show that a court is likely to conclude that the EEOC violated the APA.
“To be clear, the Court is not concluding that [EEOC] has shown a substantial likelihood of success,” the judge wrote in his order. “This case raises important questions about the complex interaction of the ADA, GINA, the ACA, and HIPAA that implicate the public interest on all sides, and the Court will have the opportunity to consider these questions carefully once the administrative record has been produced and further briefing ensues. At present, however, the burden of demonstrating success on the merits rests on AARP, and it has failed to meet that burden.”
Bates also took issue with AARP’s timing. The rules were finalized in May 2016, but AARP didn’t bring its suit until October. “Enjoining the rules now will cause uncertainty for employers as to the lawfulness of their wellness programs—and uncertainty for employees as to the terms and cost of their health insurance,” he said. “Such a disruption across the entire national employment arena is not warranted based on the showing AARP has made here to date. And it would be particularly inappropriate to cause such widespread disruption given AARP’s unexplained delay in bringing this challenge.” (AARP v. EEOC, No. 16-cv-02113 (D.D.C. Dec. 29, 2016))
Other judges haven’t been so reluctant to use this “extraordinary” measure on Obama administration employment initiatives. The U.S. Department of Labor’s overtime rules, “blacklisting” rules, and persuader rules all were enjoined in late 2016. A judge also recently blocked provisions of the U.S. Department of Health and Human Services’ ACA nondiscrimination rules.
But AARP says its fight isn’t over yet. “While AARP is disappointed in this result, it is only a temporary setback,” Dara Smith, an attorney with AARP Foundation, said in a statement. “We fully intend to continue pursuing the case to ensure that disclosure of personal and family medical information to wellness programs is truly voluntary, as provided under the civil rights laws.”
“The court’s decision made clear that the judge hasn’t made a final decision yet and that he will thoroughly review all facts and arguments in this exceptionally complicated case at the next stage, when both sides have fully briefed all issues,” Smith added.
For more information on the wellness regulations’ requirements, see EEOC issues final employee wellness program rules: The ADA rule and EEOC issues new wellness rules: The GINA rule.
Editor’s Note: David A. Slaughter, JD, contributed to this report.
Kate McGovern Tornone is an editor at BLR. She has almost 10 years’ experience covering a variety of employment law topics and currently writes for HR Daily Advisor and HR.BLR.com. Before coming to BLR, she served as editor of Thompson Information Services’ ADA and FLSA publications, co-authored the Guide to the ADA Amendments Act, and published several special reports. She graduated from The Catholic University of America in Washington, D.C., with a B.A. in media studies.