It’s back to the drawing board for the Equal Employment Opportunity Commission, which has until August to issue a new notice of proposed rulemaking on workplace wellness plans under a Dec. 20 ruling in federal court.
The decision by U.S. District Court Judge John D. Bates, part of a lawsuit against the EEOC brought by the AARP, amends one he made in August, when he said that vacating the agency’s existing wellness plan rule, which was issued in May 2015 and went into effect Jan. 1, 2017, would be “likely to have significant disruptive consequences.”
“We’re very pleased with this decision,” AARP Foundation attorney Dara Smith, who represented AARP in the case, told McKnight’s Senior Living. Although it’s not common to win a post-judgment motion, she added, the judge’s ruling didn’t come as a total surprise, given other comments he made in August in his original opinion.
The AARP originally had sued the EEOC in October 2016, taking issue with the agency’s revised definition of “voluntary” participation in wellness plans. The new rule defined participation as voluntary as long as an employer did not offer a health insurance premium discount of more than 30% to employees who answered questions related to disabilities or underwent medical exams as part of a wellness program. The EEOC’s previous policy was that a wellness program was voluntary if employers did not require employees to disclose information protected by the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act as a condition of receiving an incentive to participate.
The ADA and GINA permit employers to collect medical and genetic information from employees who participate in wellness programs as long as employees provide the information voluntarily, Bates noted in his August decision. The meaning of the word voluntary is not defined in the laws, however, he said at the time.
The AARP, Bates noted, argued that employees who could not afford to pay a 30% increase in premiums for non-participation would be forced to disclose their protected information when they otherwise would choose not to do so.
In August, Bates said that the EEOC had not provided a “reasoned explanation” for its decision to adopt the 30% incentive levels in both the ADA and GINA rules. Vacating the rules, however, would be “likely to have significant disruptive consequences” in the midst of a plan year, he said at the time.
Under his recent decision in the case, however, the challenged incentive portions of the rule will be vacated Jan. 1, 2019.
In a previous court filing made after the judge’s August ruling, the EEOC told the court it expected to issue a final rule in October 2019, with compliance by employers expected in 2021 or later. In his December decision, however, Bates called that timeline “unacceptable” and “strongly encouraged” the agency to shorten it.
“Employers will obviously have to prepare for a change in the law sooner than they otherwise would have, which means they probably have to start thinking about how they will approach it now for that plan year,” Smith said.