Court Orders EEOC to Reconsider Wellness Program Fees

Author: Robert S. Teachout, XpertHR Legal Editor

August 30, 2017

A federal court has found Equal Employment Opportunity Commission (EEOC) rules allowing employers to increase healthcare insurance premiums of employees who do not participate in wellness programs to be arbitrary, and says they must be reconsidered.

The EEOC rules allowed employers to increase premiums by 30% of the cost for self-care only coverage on employees who do not participate in programs requiring certain privacy-protected data. To avoid business disruptions, the federal court in the District of Columbia sent the rules back to EEOC for reconsideration rather than vacate them.

The EEOC had issued the regulations to address the conflict between provisions of the Health Insurance Portability and Accountability Act (HIPAA), which allows incentives to encourage participation in wellness programs, and the Americans with Disabilities Act (ADA) and Genetic Information Nondiscrimination Act (GINA), which requires participation in programs soliciting ADA- and GINA-protected information to be voluntary.

The AARP opposed the rules. The organization argued that its members would feel forced to disclose confidential information they otherwise would not share because they would be unable to afford premium increases, making participation involuntary and causing them irreparable harm.

In siding with the AARP, the court found the EEOC's rules arbitrary and capricious. Noting that the agency record did not contain any concrete data, analysis or studies to support the incentive threshold chosen, the court said the EEOC "failed to provide a reasoned explanation for its decision to adopt the 30% incentive levels in both the ADA and GINA rules."