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 May 2016, the US Equal Employment Opportunity Commission adopted new rules that allowed organizations to incent employees to share their health information as part of a workplace wellness program, determining that wellness programs would still be considered voluntary as long as these incentives or discounts did not exceed 30 percent of the cost of an employee’s individual health coverage. This Tuesday, a court in Washington, DC, determined that these rules were arbitrary and ordered the EEOC to rewrite them, SHRM’s Allen Smith explains:
Rather than vacate the rules, the court sent them back to the agency for redrafting in an attempt to avoid business disruptions. But the decision still creates “confusion and uncertainty” about employer wellness programs, said Ilyse Schuman, an attorney with Littler in Washington, D.C., and co-chair of the firm’s government affairs branch, the Workplace Policy Institute. HR professionals should know that the decision threatens the viability of wellness programs, and an employee may push back on an employer that uses financial incentives or penalties to encourage wellness program participation, said Ann Caresani, an attorney with Tucker Ellis in Cleveland and Columbus, Ohio.
“The EEOC’s regulations were helpful to employers because they finally resolved the long-pending question of what EEOC would consider to be a permissible incentive under ADA [Americans with Disabilities Act] and GINA [Genetic Information Nondiscrimination Act],” said Frank Morris Jr., an attorney with Epstein Becker Green in Washington, D.C. “This permitted employers who wanted to use incentives to design [them] with reasonable certainty that they would be lawful under the two statutes.”
The court ruled 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. Furthermore, the rules address information protected by the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act, but did not consider the potential for employers to stack incentives for disclosing their own ADA-protected information and their spouses’ GINA-protected information.
The US House Republican leadership’s plan to exempt workplace wellness programs from the genetic privacy protections of the 2008 Genetic Information Nondiscrimination Act (GINA) would dramatically expand organizations’ power to compel employees to share their health data with their employer. Nonetheless, Quizzify co-founder Al Lewis makes the case against exercising that power at the Harvard Business Review, arguing that trying to collect this kind of personal information about employees would be expensive:
Is there any evidence that genetic testing is effective in doubling the effectiveness of wellness programs (i.e., in improving health or reducing costs)? There is ample evidence of ineffectiveness. An Aetna study showed no meaningful change in risk factors after one year between at-risk groups that were or were not offered genetic testing, using the standard randomized control trial. Experts in the field have not endorsed the notion that genetic testing for chronic disease predisposition is effective, though that could change as the technology improves.
Accordingly, Lewis argues, the only way employers can really save money with genetic testing is “by relying on employees who resent the testing’s intrusiveness to refuse to comply”:
One vendor advertised noncompliance as a source of savings even without genetic testing. … It would be more common for employers to switch to offering a high-deductible plan that increases the annual deductible by, say, $1,000, but prevent it from looking like a pay cut by offering employees the chance to earn the $1,000 back by participating in the wellness program. On paper, that is an “incentive.” If an employee were to forgo genetic testing, they would not collect the incentive but would still have the higher deductible. …
Given the cost, lack of effectiveness, and likely employee reaction, why would an employer want to do this? In my opinion, they wouldn’t.
If GINA protections are withdrawn for employees participating in wellness programs and employers do choose to start collecting this information, Gizmodo’s Kristen Brown worries the information could be abused:
A major emerging area of employment law and policy concerns employers’ right to collect employee health data or genetic testing data as part of a workplace wellness program, and to compel employees to participate in these programs by offering incentives. Although overshadowed by their plan to repeal and replace the Affordable Care Act, a bill advanced by Republicans in the US House of Representatives last week would significantly expand employers’ rights in this regard by legislating that the genetic privacy protections of the Genetic Information Nondiscrimination Act of 2008 (GINA) don’t apply to genetic tests conducted as part of a wellness program, according to Sharon Begley at Stat News:
The bill, HR 1313, was approved by a House committee on Wednesday, with all 22 Republicans supporting it and all 17 Democrats opposed. It has been overshadowed by the debate over the House GOP proposal to repeal and replace the Affordable Care Act, but the genetic testing bill is expected to be folded into a second ACA-related measure containing a grab-bag of provisions that do not affect federal spending, as the main bill does.
“What this bill would do is completely take away the protections of existing laws,” said Jennifer Mathis, director of policy and legal advocacy at the Bazelon Center for Mental Health Law, a civil rights group. In particular, privacy and other protections for genetic and health information in GINA and the 1990 Americans with Disabilities Act “would be pretty much eviscerated,” she said.
Both the American Benefits Council and the Society for Human Resource Management are backing the bill, Richard Stolz explains at Employee Benefit News: