AARP Sues for Injunction of EEOC Wellness Program Rules

The AARP has filed a lawsuit alleging that the Equal Employment Opportunity Commission’s (EEOC)’s final wellness program rules under the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA) are arbitrary, capricious, an abuse of discretion, and not in accordance with law. The AARP is asking that the rules be invalidated.

The AARP starts its complaint by saying that the EEOC rightly argued in 2014 in a lawsuit against Honeywell International that because an employer imposed heavy penalties on employees through a coercive wellness program, employees stood to “lose the fundamental privilege under the ADA and GINA to keep private information private.” Yet, the complaint says, in 2016, the EEOC issued regulations under the ADA and GINA that allow employers to impose heavy financial penalties on employees who do not participate in employee wellness programs. On average, these penalties would double or even triple those employees’ individual health insurance costs, the AARP claims.

The lawsuit notes that ADA and GINA generally prohibit employer requests for employees’ (and dependents’) medical data—including virtually all queries likely to reveal disability-related or genetic information—because of Congress’ conclusion that such revelations lead to employment discrimination. Improper employer questions themselves constitute illegal discrimination under both statutes and, while the ADA and GINA include narrow exceptions for medical inquiries in the context of wellness programs, each law requires participation in such programs’ collection of medical or genetic data to be strictly “voluntary.”

“For fifteen years, consistent with Congress’ intent, the EEOC maintained that employee wellness programs implicating confidential medical information are voluntary only if employers neither require participation nor penalize employees who choose to keep their medical and genetic information private,” the AARP says in the complaint.

The lawsuit claims the 2016 final rules depart starkly from the EEOC’s longstanding position. Under the 2016 ADA rule, employers may penalize employees by up to 30% of the full cost of individual health insurance premiums (both employee and employer contributions), if they invoke their right to keep medical information confidential. Under the 2016 GINA rule, employers may charge an additional 30% penalty—for a total, under both rules, of up to 60% of the full cost of individual health insurance premiums—where an employee keeps a spouse’s medical information confidential.

Garrett A. Fenton, member at Miller & Chevalier in Washington, D.C., says, “While the ADA and GINA regulations' 30% limits on permissible wellness incentives are not specifically written to be cumulative, it is possible, under certain facts, for an employer to offer separate incentives of up to 30% of the cost of coverage, effectively amounting to a total of 60%. In theory, an employer could provide for up to a 30% wellness incentive in connection with a disability-related inquiry or medical examination of an employee (e.g., a blood draw and comprehensive health risk assessment), and separately provide for up to an additional up-to-30% wellness incentive in connection with a health questionnaire that solicits information about a spouse's current or prior diseases or disorders. This seems to be the scenario that the AARP had in mind in referring to the potential for an employer to offer incentives (or penalties) amounting to up to 60% of the cost of coverage.”

He adds, “It is important to keep in mind that the ACA/HIPAA regulations on wellness programs could operate to limit the aggregate incentives to 30% (or, for programs involving tobacco use, 50%) of the total cost of coverage for any eligible employees and dependents, if and to the extent that the wellness incentives are offered under a group health plan, and are of the "health-contingent" variety. Granted, a mere health questionnaire that solicits current or prior health information from an employee's spouse, for example, is not likely to be considered a health-contingent wellness program under those rules.”

The AARP says the EEOC failed to adequately justify its reversal of position and ignored comments on the proposed rules that expressed concern. The AARP’s comments described the particularly heavy toll that the penalties/incentives would take on older workers, who are more likely to have the less-visible disabilities—or conditions likely to be perceived as disabilities—and medical histories that are at risk of exposure to discrimination through non-job-related medical inquiries and exams.

The AARP, on behalf of its aggrieved members, filed the lawsuit against the EEOC for declaratory judgment and permanent injunctive relief under the Administrative Procedure Act.

It contended that many of its members would have standing to sue in their own right because they will be adversely affected by the rules. However, the interests that AARP seeks to protect on behalf of its members are germane to AARP’s purposes: addressing the needs and representing the interests of people age fifty and older and fighting to protect older people’s financial security, health, well-being, and civil rights, including protections from discrimination in employment.

It argued that neither the claims asserted nor the relief requested requires individual AARP members to participate in the lawsuit.

The complaint may be viewed here.