AARP sues to block wellness program rules

Barbells and a scale

When the federal government finalized regulations this spring that allow companies to tie wellness program participation to considerable health insurance discounts, some groups blasted the move as unfair and discriminatory. Now a leading critic has taken the issue to federal court.

AARP, the advocacy group that represents older Americans, filed a lawsuit Monday in the U.S. district court of the District of Columbia against the U.S. Equal Employment Opportunity Commission (EEOC).

AARP had sharply criticized the EEOC’s two finalized rules in May, arguing the rules violate "both the letter and the spirit of the civil rights laws against disability and genetic discrimination" by requiring employees to either submit their sensitive medical and genetic information or pay significantly more for health insurance.

Consistent with those laws--the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act—the EEOC has maintained that employee participation in wellness programs’ collection of medical or genetic data to be strictly voluntary, the suit says. Indeed, the EEOC previously sued Honeywell over its wellness program for penalizing employees who did not undergo biometric screening, but was unsuccessful in blocking the program.

But the new federal rules “depart starkly from the EEOC’s longstanding position,” because they allow employers to penalize employees by up to 30 percent of the full cost of individual health insurance if employees invoke their right to keep medical information confidential, according to the lawsuit. On average, the suit adds, penalties allowed by the new rule could double or even triple employees’ health insurance costs.

Thus, the suit seeks a preliminary injunction to block the rules, which are slated to take effect in 2017.

The rising popularity of wellness programs, spurred in part by provisions of the Affordable Care Act, has sparked debate about the balance between employers’ efforts to control healthcare costs and employees’ rights to privacy. Some are also concerned that these programs share data with third-party vendors.

Yet James Gelfand, senior vice president for health policy for the Erisa Industry Committee, a trade group representing employers on issues such as health insurance benefits, told the New York Times there is no evidence that companies use medical or genetic information to discriminate against employees.

Likewise, the National Business Group on Health was supportive of the EEOC’s new rules, saying they provided much-needed clarification for employers, FierceHealthPayer has reported.