The Equal Employment Opportunity Commission’s (EEOC) rules governing the fees employers can impose on employees who do not participate in wellness programs took effect on Jan. 1, surviving a motion to block them filed by AARP. The preliminary injunction, however, will not stop AARP’s lawsuit, and employers can expect to hear more on the subject later in 2017.
The lawsuit is a result of a rise in the controversial trend of employers tying participation in wellness programs to penalties and discounts on employee healthcare. The new regulations, issued under the Americans with Disabilities Act, allow employers to increase premiums for employee-only health coverage by up to 30 percent if employees choose not to participate in wellness programs sponsored by the company.
AARP argued in the lawsuit that its members will suffer irreparable harm due to these premium increases and that the programs would force them to disclose confidential information. The case was made by AARP that premium increases are irreparable harm, but this was determined to instead be economic harm by the court.
Employers welcome this ruling, but there is still uncertainty in some aspects of the EEOC’s new rules. This concerns the inconsistencies between the EEOC’s rules and ACA rules, which will be reevaluated when democrats lose their majority among EEOC commissioners in July. For now, wellness programs may be participatory. This includes reimbursements for gym memberships or outcome-based rewards based on health goals.
Before implementing a wellness program for your company, seek legal counsel to navigate the many rules that may apply.