When a district court in Washington, DC, ordered the US Equal Employment Opportunity Commission to rewrite its rules governing incentives for employee wellness programs last August, the court declined to vacate the commission’s current rules in order not to create disruptions in businesses that had already implemented programs based on them. The AARP, a lobbying group for older Americans and the plaintiff in the case against the EEOC, petitioned the court to amend its judgment and vacate the rules.
In its latest ruling, issued in late December, the court agreed to do so, but not until January 2019. Labor and employment attorney Jonathan E. O’Connell outlines the latest chapter of this legal drama at SHRM:
Also playing into the court’s decision to modify its prior judgement was the timeline offered by the EEOC for issuing its revised rule. The EEOC indicated that the new rule would not likely be ready until 2021. The court stated that such a lengthy delay was inconsistent with its expectation that the revised versions of the rule would be issued in a timely manner and thus also supported reconsideration of the court’s earlier decision. The court stated that “an agency process that will not generate applicable rules until 2021 is unacceptable” and strongly encouraged the EEOC to take steps to implement revised regulations faster.
Arguing on behalf of the EEOC, the Justice Department pushed back on that decision in a court filing this week, arguing that the court did not have jurisdiction to impose a deadline on the agency or force it to write new rules at all, Erin Mulvaney reports at the National Law Journal:
In sending the case back to the agency, U.S. District Judge John Bates set deadlines for action. The EEOC, represented in court by the U.S. Department of Justice, on Tuesday argued against the timeline Bates issued. The Justice Department urged Bates to reconsider the timeline—and let the agency itself craft the next steps.
The action indicates the EEOC is uncertain what direction the new Republican-led commission will take once the Trump administration’s nominees are in place. The U.S. Senate is expected to confirm chair Janet Dhillon, former general counsel for Burlington Stores, and Daniel Gade, a West Point professor and Iraq War veteran. They would join Victoria Lipnic as the Republican majority with Democratic members Charlotte Burrows and Chai Feldblum.
The EEOC’s rules, adopted in May 2016, determined how anti-discrimination laws, including the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA), would apply to employee wellness programs, establishing that such programs would be considered voluntary as long as the incentives or discounts offered to participating employees did not exceed 30 percent of the cost of an employee’s individual health coverage. The AARP sued to challenge those rules the following October, arguing that they would force many members of the association to choose between divulging private health information to their employer or effectively paying heavy financial penalties.
In its ruling in August, the court decided that the EEOC had failed to provide a well-reasoned justification for setting the limit for incentives at 30 percent of the cost of a health insurance plan, a figure it had simply borrowed from Health Insurance Portability and Accountability Act (HIPAA) regulations. In the meantime, House Republicans advanced a bill last March that would exempt these programs from GINA, supported by the American Benefits Council and SHRM. The bill has not yet made its way to the House floor and its prospects for passing both houses of Congress are uncertain. In the absence of legislation, the EEOC’s rules are the only policies regulating wellness programs and at the moment, the future of those rules is uncertain as well.