New EEOC Rules on Employer Wellness Programs Lead to Lawsuit

The Equal Employment Opportunity Commission (EEOC) recently issued two new Final Rules regarding employer wellness programs. 81 Fed. Reg. 31125, 81 Fed. Reg. 31143 (May 17, 2016). Federal law defines a “wellness program” as any program offered to employees that is “designed to promote health or prevent disease.” 42 U.S.C. § 300gg(j)(1)(A). The new rules address compliance under Title I of the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq.; and Title II of the Genetic Information Nondiscrimination Act (GINA), 42 U.S.C. § 2000ff et seq. In addition to prohibiting employment discrimination, both statutes include provisions for the protection of employees’ medical information. Concerns over the new rules led AARP, an advocacy group for older Americans, to file a lawsuit seeking an injunction against the EEOC. AARP v. EEOC, No. 1:16-cv-02113, complaint (D.D.C., Oct. 24, 2016).

The EEOC notes that some wellness programs offer incentives to employees to encourage participation, from discounts on health insurance premiums to cash or other prizes. Other programs offer similar incentives for specific outcomes like weight loss. The ADA prohibits employment discrimination based on disability, including in the availability of employment-related fringe benefits. The statute does not allow employers to require medical examinations or make inquiries about disabilities if they are not directly related to the employee’s job duties, but it allows an exception for “voluntary” medical examinations in connection with a wellness program. 42 U.S.C. § 12112(d)(4).

GINA prohibits discrimination based on genetic information and places strict limits on employers’ ability to collect medical history and genetic information from employees. Employers may collect employees’ genetic information in connection with a voluntary wellness program, with limits on who may access that information, how employers may use that information, and which incentives or inducements employers may offer to encourage participation in the program. 29 C.F.R. § 1635.8(b)(2).

The EEOC’s new rules are scheduled to take effect at the beginning of 2017. The rule dealing with ADA compliance amends the definition of “voluntary” in the EEOC’s regulations. A program is “voluntary” if the employer does not require employees to participate, does not deny any health insurance coverage to non-participating employees, does not retaliate or take other adverse actions against non-participating employees, and provides a written notice of rights to employees regarding the collection and use of medical information. 81 Fed. Reg. 31139-40, 29 C.F.R. § 1630.14(d)(2).

The rule further states that incentive-based programs remain “voluntary” as long as the maximum incentive is equal to or less than 30 percent of an employee’s annual health insurance premiums. 81 Fed. Reg. 31139, 29 C.F.R. § 1630.14(d)(3). The EEOC notes that these incentives can be viewed as a penalty for non-participation, since non-participating employees must pay more for health coverage. 81 Fed. Reg. 31135.

AARP claims in its lawsuit that the new definition of “voluntary” in the ADA rule “is not a reasonable construction of the statutory term” in the ADA. AARP, complaint at 22. It further states that the 30 percent “penalty” for non-participation allowed by the rules is “arbitrary and capricious.” Id. at 23. It makes similar claims about the GINA rule and seeks an injunction against both rules.

If you need to speak with a lawyer about an disability discrimination matter in New Jersey or New York, contact the Resnick Law Group online, at 973-781-1204, or at (646) 867-7997.

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