Government Wins Some Freedom for Any Wellness-Plan-Rule Redo(1)

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By Patrick Dorrian

A federal judge agreed to partly stay out of efforts by the federal government to revamp its regulations on employer incentives intended to spur employee participation in corporate wellness programs.

The development comes two days after the Equal Employment Opportunity Commission told Judge John D. Bates it believed he overstepped his authority in December when Bates said the agency must notify the public by Aug. 31, 2018, if it plans to amend the rules. The EEOC said that whether it chooses to rework the rules—and on what time schedule it does so—should be within the agency’s policy-making discretion.

The U.S. District Court for the District of Columbia on Jan. 18 agreed. It issued a two-page order freeing the EEOC from that requirement. But consistent with the court’s prior orders in the case, the portions of the agency’s existing wellness regulations under the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act will only remain in effect until Jan. 1, 2019. And the EEOC must still file a status report with the court by March 30, 2018, the court said.

Retention of the status report requirement means the EEOC only partly succeeded in convincing the court it lacks the authority to oversee any agency efforts to fix shortcomings identified in the existing ADA and GINA wellness rules. The court in December said the status report must disclose the EEOC’s proposed schedule for reviewing the rules, “including any further administrative proceedings.”

AARP had opposed the EEOC’s existing wellness plan rules. The nonprofit group argued that provisions allowing employers to include participation incentives of up to 30 percent of the cost of an employee’s health insurance premiums in their plans meant employee participation in those programs wouldn’t really be “voluntary,” as required by the ADA and GINA. The court sided with AARP and found in August that the EEOC didn’t sufficiently explain how such programs met the laws’ voluntariness requirement before adopting the rules in May 2016.

Judge Bates in the latest ruling also rejected the EEOC’s request in its Jan. 16 motion for reconsideration that the court clarify that it would close the case now that it has invalidated—effective Jan. 1, 2019—the portions of its ADA and GINA wellness regulation challenged by AARP. The EEOC had argued that federal courts may maintain continuing jurisdiction after invalidating a disputed administrative rule only where an agency has a history of noncompliance with court orders or a pattern of past delays, and that the court didn’t find evidence of either.

But Bates said the court will keep the case open, and it “will be deemed closed” as of Jan. 2, 2019.

The EEOC doesn’t comment on pending litigation, an agency spokeswoman told Bloomberg Law in a Jan. 19 email.

“AARP is pleased with the latest decision, which preserves our victory and continues to ensure that the unlawful portions of the rules will be vacated as of January 1, 2019,” Dara Smith, a senior attorney with AARP Foundation, told Bloomberg Law in a Jan. 19 email.

The case is AARP v. EEOC, D.D.C., No. 1:16-cv-02113, motion for reconsideration partly granted 1/18/18.

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