Payers, Patient Engagement

AARP takes on EEOC in new twist on employer wellness lawsuits

The AARP’s lawsuit challenges the Equal Employment Opportunity Commission’s final rule defining defined what constitutes a voluntary health program and providing guidance on employee incentives.

A court gavel on 100 bills - legal concept

A court gavel on 100 bills – legal concept

In the most flattering light, employer wellness programs are billed as a way to help companies control their healthcare costs and alert employees to improve the way they manage their health or even flag up previously undiagnosed health problems. But there has also been pushback against these programs from lawsuits claiming employer wellness initiatives are unfair to reports claiming they don’t actually save money.

Typically it is the U.S. Equal Employment Opportunities Commission (EEOC) that’s filed lawsuits over employer wellness initiatives, Littler Mendelson Special Counsel Russell Chapman noted in an article on the employment and labor law firm’s website. Although the news this week that AARP is suing the EEOC is a striking development, dissatisfaction has been building since EEOC published its final rule on employer wellness programs in May this year.

The AARP claimed in a news release that the final rule issued by EEOC reversed the commission’s longstanding position to protect employees “from being pressured into revealing confidential medical and genetic information to their employers.” The AARP release noted that the final rule makes employees vulnerable to discrimination.

“Contrary to statutory law, the rules effectively enable employers to make employees ‘offers they can’t refuse’,” said William Alvarado Rivera, Senior Vice President for Litigation at AARP Foundation, in the release. The AARP Foundation represents AARP in the federal suit.

Rivera added: “These rules are likely to have an immediate, negative impact on workers who will have to face a lose-lose choice between sacrificing their civil rights and suffering financial hardship.”

AARP maintains in the release that workers who want to keep their medical and genetic data private could face penalties that double or triple their health insurance costs.

EEOC’s final rule on employer wellness has attracted the ire of organizations beyond the AARP, particularly consumer and disability rights advocates, for the provision that employers seeking to get workers to join wellness programs can set financial rewards or penalties running up to 30 percent of the cost for an individual in the company’s health insurance plan.

But the AARP complaint has its critics as well. James Gelfand, senior vice president for health policy for the Erisa Industry Committee — a trade group for employer issues like health benefits — took issue with the AARP suit. He told The New York Times that employers are never informed of which employees have a particular condition and aren’t using the information to discriminate against them.

Just two years ago, Chapman observed, EEOC filed lawsuits against three companies: Honeywell International, Orion Energy Systems, and Flambeau, a Wisconsin-based plastics manufacturer. The complaints against Flambeau and Orion Energy alleged that the companies’ employer wellness programs violated the Americans with Disabilities Act. In the case of Honeywell, EEOC took issue with some provisions of the company’s employer wellness plan, which required participants to complete biometric screenings, and avoid tobacco use or participate in a smoking cessation program. Those who failed to comply would have surcharges added to the employees’ share of health plan premiums. The Honeywell case was later voluntarily dismissed and the Wisconsin District Court dismissed the Flambeau suit.

The Flambeau ruling is significant, Chapman noted, because it delivered a positive ruling for the employer wellness industry.

The Wisconsin District Court ruled that an employer may require compliance with a wellness program as a condition for participation in its group health plan, without violating the Americans with Disabilities Act

EEOC’s move to issue the final rule in May came to pass because of the criticism directed at the agency over filing lawsuits against employers without providing guidance for what it would consider a compliant wellness program under the ADA and the Genetic Information Nondiscrimination Act, Chapman pointed out.

Update An EEOC spokesperson said in an email that the agency would not comment at this time.

Photo: zimmytws, Getty Images