In October 2016, AARP sued the Equal Employment Opportunity Commission (“EEOC”) under the Administrative Procedures Act (“APA”) arguing that there was no explanation for the shift in the EEOC’s position relating to what makes participation in a wellness program “voluntary”. Originally, the EEOC argued that in order for a wellness program to be “voluntary,” employers could not condition the receipt of incentives on the employee’s disclosure of American with Disabilities Act (“ADA”) or Genetic Information Nondiscrimination Act (“GINA”) protected information. However, under the wellness regulations, the EEOC now takes the position that an incentive of up to 30 percent of self only coverage would not render a program involuntary. AARP argued that participation in a wellness program was not truly “voluntary” if an employee must choose between receiving a 30 percent decrease in health insurance premiums or providing their family’s personal health information to their employers. See AARP v. EEOC.
On August 22, 2017, AARP scored a win when U.S. District Judge John Bates granted AARP’s motion for summary judgment, finding that the EEOC had not sufficiently explained why programs that allowed employee participation incentives of up to 30 percent of the cost of the employee’s health insurance premiums didn’t violate the ADA or GINA requirements that such programs be voluntary. August 22, 2017 Opinion. Shortly thereafter, AARP filed a Motion to Alter or Amend the Judgment asking the Court to either (1) vacate the wellness regulations but stay the mandate until January 1, 2018, or (2) issue an injunction against enforcement of the regulations effective January 1, 2018. The EEOC opposed the motion stating that a “2018 vacatur of the Rules would be too disruptive for employers and employees.”
The Court’s December 20, 2017 Memorandum Opinion rejected AARP’s argument that the wellness regulations should be halted January 1, 2018. Judge Bates determined that the current rules should remain in effect until January 1, 2019 in order to give the EEOC time to issue interim or revised rules on the issue. The Opinion goes on to state that the “Court will also hold the EEOC to its intended deadline of August 2018 for the issuance of proposed rulemaking…but an agency process that will not general applicable rules until 2021 is unacceptable. Therefore, EEOC is strongly encouraged to move up its deadline for issuing the notice of proposed rulemaking, and to engage in any other measures necessary to ensure that its new rules can be applied well before the current estimate of sometime in 2021.”
In response to Judge Bates’ December 20th Opinion, the EEOC filed a Partial Motion for Reconsideration alleging that there was no basis for the Court to retain jurisdiction over the matter or to set deadlines for the EEOC to issue public notice and to file a status report with the Court. The EEOC argued that “whether to amend or scrap the portions of the rules the court found illegal, and on what schedule, is entirely within the EEOC’s discretion.” Therefore, the EEOC has asked the Court to reconsider these aspects of its ruling.
In light of these decisions—and the uncertainty surrounding the future of the wellness regulations—employers should continue to run their wellness programs in accordance with the current regulations for 2018, but anticipate a change in the future.