The American Association of Retired Persons (AARP), the nation’s largest consumer interest group for Americans over 50, is suing the Equal Employment Opportunity Commission (EEOC) over its new wellness program rules, which the AARP alleges violates rules protecting the confidentiality of medical information. The new rules were issued in May but do not take effect until 2017. The AARP is seeking a preliminary injunction to block the new rules. The case, filed October 24, in Federal District Court in Washington is AARP v. EEOC.

The AARP contends that wellness programs, which many employers offer to encourage healthier lifestyles and prevent disease, violate anti-discrimination laws that protect workers’ confidential medical information. According to the AARP, the programs invade workers’ privacy as they often involve medical exams and questioning, and leave them vulnerable to employment discrimination based on disability or genetic information. The AARP specifically opposes wellness programs because older workers are more likely to have the types of less visible conditions (i.e high blood pressure and heart disease) that can become exposed through participation in wellness programs. The AARP has typically been supportive of the EEOC’s efforts to provide guidance on wellness programs—but now, the AARP is in the unusual position of finding itself at odds with the EEOC.

The AARP’s suit also questions whether wellness programs are truly “voluntary” because there are significant financial repercussions for employees who choose not to participate. According to the final rules, employers can set an incentive as high as 30 percent of the annual cost of a worker’s health insurance coverage starting in 2017. The AARP is arguing that because the incentives are so high, the choice to participate in a wellness program is no longer really voluntary, and that employees will feel forced to participate in wellness programs in order to avoid significant penalties.

Key takeaways from the EEOC’s May Final Rules on Wellness Programs:

  • The Final Rules describe how Title I of the Americans with Disabilities Act (ADA) and Title II of the Genetic Information Nondiscrimination Act (GINA) apply to wellness programs offered by employers that request health information from employees and their spouses.
  • ADA and GINA generally prohibit employers from obtaining and using information about employees’ own health conditions or health conditions of their family members.
  • However, both ADA and GINA allow employers to obtain this information if the employer is providing health or genetic services as part of a voluntary wellness program.
  • Financial Incentives:
    • Final ADA Rule: wellness programs that are part of a group health plan may offer incentives of up to 30 percent of the total cost of self-only coverage.
    • Final GINA Rule: maximum inducement for employee’s spouse to provide information about current or past health status is 30 percent of the total cost of self-only coverage.
  • Final Rule includes standards on what makes a wellness program “voluntary”:
    • Employer cannot require employee participation;
    • Employer cannot deny coverage under any of its group health plans for non-participation;
    • Employer cannot take any adverse employment action or retaliation against employees who do not participate.
  • Notice Requirement: For employee’s participation in a wellness program that is part of a group health plan to be voluntary, employers must provide a notice clearly explaining – what medical information will be obtained, how it will be used, who will receive the information, restrictions on disclosure, and their methods used to prevent improper disclosure.

Kelley Drye will provide updates on the outcome of the dispute between the AARP and the EEOC, which potentially will help define the limits of appropriate wellness programs under applicable law.