AARP Seeks Halt to Agency Wellness Rules Starting Jan. 1

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By Patrick Dorrian

AARP wants to block the EEOC’s regulations on employer wellness programs starting in 2018 to give the agency time to fix the deficient rules.

The rules should remain in effect for the remainder of 2017 to avoid further disruption to employers and employees, AARP said in its Aug. 30 motion with the U.S. District Court for the District of Columbia. But allowing the rules to remain effective into 2018 while the EEOC considers how to fix its explanation of what makes employee participation in a plan “voluntary” and to cure other deficiencies would be unfair to both workers and employers, AARP said ( AARP v. EEOC , D.D.C., No. 1:16-cv-02113, motion filed 8/30/17 ).

AARP filed its motion just over one week after the court ruled that the Equal Employment Opportunity Commission must provide additional reasons for adopting portions of the rules that allow companies to provide incentives for employee participation in wellness programs. The court in its Aug. 22 decision remanded the rules to the EEOC for reconsideration, but didn’t vacate them, which means that the rules remain in effect for wellness programs during the review process.

The wellness rules were implemented by the EEOC in May 2016 under the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act. They allow employers to offer incentives of up to 30 percent of the cost of the employee’s health insurance premiums to induce participation in a wellness program. AARP’s October 2016 lawsuit challenges whether a program that provides such participation incentives is truly voluntary.

Remedy Needed Sooner, Not Later

AARP asked the court to alter or amend the Aug. 22 decision because the court’s handling of the remedy that should result from its merits determination was “unusual,” Dara Smith, an attorney with AARP Foundation Litigation in Washington, told Bloomberg BNA. It allows federal regulations that the court finds lacking to remain “on the books,” so future harm to employees and employers from continued application and enforcement of the rules next year is likely, she said.

The court has given the EEOC until Sept. 11 to respond to AARP’s motion.

“The agency is reviewing the latest filing in this case and determining an appropriate response,” EEOC spokeswoman Kimberly Smith-Brown told Bloomberg BNA in an Aug. 31 email.

Two Primary Concerns

“Our biggest concern is that if the rules carry into 2018,” more workers will be negatively affected, Smith said.

Unless application or enforcement of the EEOC rules is blocked, employees will continue to face involuntary disclosure of their confidential health information through employer wellness programs in 2018, AARP’s motion says.

In addition, “employer confusion as to what law applies” will persist if rules that have been deemed deficient are allowed to remain in effect beyond the end of this year, Smith said.

And the risk of further employee harm and employer confusion could extend beyond next year, because it’s unclear whether the EEOC will be able to get revised ADA and GINA regulations approved by the end of 2018 or whether court delays might stall the agency’s progress or the implementation of any revisions made to the rules, Smith said.

Two Remedies Proposed

AARP’s motion proposes two possible remedies, Smith said. The first is a modified version of the traditional vacatur order, which would vacate the rules immediately but delay the effective date of the vacatur until the end of this year, she said.

Alternatively, the court could issue a “prospective injunction” barring the EEOC’s enforcement of the existing wellness plan rules that wouldn’t take effect until Jan. 1, she said.

Either step, she said, hopefully would result in a return to “the state of the law” prior to the EEOC’s issuance of its 2016 regulations. Under that “regime,” employee participation in an employer’s wellness program had to be 100 percent voluntary, she said.

Daniel B. Kohrman of AARP Foundation Litigation also represents AARP. Steven A. Myers and Tamra Tyree Moore of the Justice Department’s Civil Division, Federal Programs Branch, in Washington represent the EEOC.

To contact the reporter on this story: Patrick Dorrian in Washington at pdorrian@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Chris Opfer at copfer@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

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