Judge rules feds must re-evaluate wellness program rules

justice scales and gavel
A federal judge has remanded two rules governing employer wellness programs back to the Equal Employment Opportunity Commission for reconsideration. (Getty/BrianAJackson)

A federal judge has ordered the Equal Employment Opportunity Commission to reconsider two federal rules that allow companies to offer sizeable health insurance discounts in exchange for employees’ participation in wellness programs.

The EEOC finalized the rules—which relate to the Americans with Disabilities Act (ADA) and Genetic Information Nondiscrimination Act (GINA), respectively—in May 2016. The rules specify that wellness program participation must be voluntary, but allow employers to offer incentives of up to 30% of the total cost of self-only coverage.

However, some advocacy groups cried foul, arguing that the rules would force workers to choose between handing over sensitive medical and genetic information or paying thousands of dollars more for insurance. One of those groups, the AARP, took it a step further by filing a lawsuit against the EEOC. 

The presiding judge in the case, John Bates, previously denied (PDF) the AARP's request for a preliminary injunction, which would have halted the implementation of the rules.

But in a ruling (PDF) this week, Bates—the same judge who blocked the Aetna-Humana deal—issued a summary judgment in the AARP’s favor and denied the EEOC's motion to dismiss the case. 

The EEOC, he wrote in his ruling, has “failed to provide a reasoned explanation” for its decision to adopt the 30% incentive levels in the two rules. “Neither the final rules nor the administrative record contain any concrete data, studies or analysis that would support any particular incentive level as the threshold past which an incentive becomes involuntary in violation of the ADA and GINA,” he added.  

But because vacating the rules would “have significant disruptive consequences” for employers that have already adopted wellness programs that offer participation incentives, Bates ordered the rules remanded to the EEOC for reconsideration.

In a statement to FierceHealthcare, Lisa Marsh Ryerson, president of the AARP Foundation, hailed the decision as a “tremendous victory for workers.”

“No one should be coerced into revealing personal health information in the workplace," she said.

Steve Wojcik, vice president of public policy at the National Business Group on Health, said in a statement that the ruling is "unlikely to be the end of the story," noting that "for now, nothing changes for employer wellness initiatives."

"Though the EEOC rules are not perfect, they do clarify underlying ambiguities in the law and have helped assure that employees and their families can benefit from these programs that promote their well-being,” he added.