Policy Archive

Lawsuit Targets Wellness Program Penalties and Invasion of Privacy

July 16, 2019 - A lawsuit filed against Yale claims that its wellness program imposes excessive penalties for nonparticipation or noncompliance, and infringes on employees' genetic/health privacy. Employers are increasingly implementing wellness programs to counter rising healthcare costs, shifting more of the expense to their workers despite limited evidence that these programs are effective. The third-party vendors that administer most employer-sponsored wellness programs are not bound by the same laws that protect privacy and individual rights as employers or healthcare providers.

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BACKGROUND

Rules issued by the U.S. Equal Employment Opportunity Commission (EEOC) in May 2016 weakened protections against invasion of medical privacy and erode workplace and health insurance discrimination safeguards afforded by the GINA and ADA laws. In December 2017, a court vacated the EEOC's wellness program incentive rules. Effective January 1, 2019, workers and their spouses may no longer be financially pressured into providing health history information or undergoing medical exams as part of an employer-sponsored wellness program; instead, this type of participation in a wellness program must be genuinely voluntary.

The Genetic Information Nondiscrimination Act (GINA) prohibits health insurance companies and employers from using a family history of disease or genetic test results to discriminate against people. Rules issued by the U.S. Equal Employment Opportunity Commission (EEOC) in May 2016 weaken protections against invasion of medical privacy and erode workplace and health insurance discrimination safeguards afforded by GINA and Americans with Disabilities Act (ADA). 

The EEOC proposed these changes in 2015 in an effort to better align ADA and GINA with the wellness components of the Patient Protection and Affordable Care Act (PPACA). A large coalition of groups—including FORCE, AARP, The Leadership Conference on Civil and Human Rights, National Disability Rights Network, American Society of Human Genetics, National Women's Law Center and numerous others—fought the changes which permit financial penalties for nonparticipation in employer-based wellness programs. Unfortunately, the new rules were finalized and apply to employer-sponsored wellness programs beginning on or after January 1, 2017.

Read more in our official statement on the new rules.

The AARP filed a motion for preliminary injunction and legal complaint to the new ADA and GINA rules in October 2016. FORCE supported this legal challenge. In August 2017, the DC District Court ruled in favor of the AARP in its challenge of the EEOC's 2016 regulations, finding that the agency failed to provide a reasoned explanation of how large financial penalties (usually in the form of much higher health insurance premiums) conformed with the ADA and GINA requirements that health inquiries and exams as part of workplace wellness programs must be voluntary. The court told the EEOC to rewrite its regulations in accordance with the court's opinion. However, the judge left the harmful rules in effect, citing concern about the risk of disruption to employers' already-planned benefits offerings, and told the EEOC to submit a schedule for the rewritten rules. The EEOC's proposed schedule would have left the coercive rules in effect for at least another 3 years—through 2020.

AARP objected to the injustice of workers continuing to have their civil rights and medical privacy violated while the EEOC re-regulates and filed a motion asking the judge to "vacate" the rules as of January 2018, or as soon as possible. On December 20, 2017, the court granted AARP's motion. Although the order was issued too late to address coercive penalties for the 2018 enrollment year, the ruling will take effect on Jan. 1, 2019. This means that workers and their spouses may no longer be financially pressured into providing medical information or undergoing medical exams; instead, this type of participation in a wellness program must be genuinely voluntary, beginning in 2019 (instead of 2021).