August 21, 2018

August 21, 2018

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August 20, 2018

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Court to the Equal Employment Opportunity Commission: “Try Again” on Wellness Rules

In October 2016, the American Association of Retired Persons (AARP) sued the US Equal Employment Opportunity Commission (EEOC) in the US District Court for the District of Columbia seeking an injunction against the latest iteration of wellness program regulations. The final EEOC regulations issued last year offer employers a roadmap for offering employee wellness programs that pass muster as “voluntary” examinations under the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act of 2008 (GINA). In response, AARP argued that the EEOC failed to adequately justify the new rules and abused its regulatory power by reversing course on its long-standing position against wellness programs.  

This week, in yet another twist in the long and winding road of wellness program rules, the DC District Court agreed with AARP. The DC District court declined to vacate the regulations and instead ordered the EEOC to revisit the regulations, reasoning that that an abrupt change in the law would cause wide-spread disruption for employer-sponsored wellness programs. Key points in the DC District Court’s opinion include:

  • EEOC wellness regulations defined the 30 percent cap on incentives differently from the HIPAA definition of the 30 percent incentive cap.

  • The incongruity between the Health Insurance Portability and Accountability Act of 1996 (HIPAA) wellness regulations and the EEOC wellness regulations has caused plan sponsors confusion and additional issues in administering wellness programs as wellness programs must be analyzed under both HIPAA and EEOC regulations for compliance.

  • The DC District Court found nothing in the EEOC’s administrative record that explains the agency’s conclusion that a 30 percent incentive level is the appropriate measure for voluntariness.

While the EEOC reviews and responds to the DC District Court’s decision, the current EEOC wellness regulations remain in effect.

© 2018 McDermott Will & Emery

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About this Author

Megan Mardy Attorney McDermott Will Emery
Associate

Megan Mardy is an associate in the law firm of McDermott Will & Emery LLP and is based in the Firm's Chicago office.  Megan focuses her practice primarily on designing, amending and administering 401(k) plans, profit sharing plans, pension plans, cafeteria plans and welfare benefit plans.  She also has experience counseling clients regarding compliance with HIPAA, the Affordable Care Act, and other federal laws affecting group health plans.  Megan has counseled privately and publicly-held corporations and tax-exempt entities regarding fiduciary issues under ERISA, employee benefits...

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Emily Rickard, McDermott Will Emery, Employee Benefits Matters Lawyer, ERISA Litigation Attorney
Associate

Emily Rickard is an associate in the law firm of McDermott Will & Emery and is based in the Firm’s Washington D.C. office. She focuses her practice on employee benefits matters.

Emily previously served as an ERISA litigation intern within the Plan Benefits Security Division of the Office of the Solicitor at the U.S. Department of Labor in Washington D.C. She studied executive compensation trends while working as a research assistant at Vanderbilt University Law School. She also served as a judicial intern for the Honorable Jane Roth at the U.S. Court of Appeals for the Third Circuit in Philadelphia.

During law school, Emily was active in public interest work. Emily was a program director for the Medical Legal Partnership in Nashville, Tennessee, where she helped provide comprehensive legal aid service for patients at a free medical clinic.

Emily received her J.D. in May 2015 from the Vanderbilt University Law School, where she served as an executive student writing editor for the Vanderbilt Journal of Transnational Law. She earned her B.A. in diplomatic history, magna cum laude, with minors in African Studies and Latin, from the University of Pennsylvania. Emily is a 2014 Gary S. Tell ERISA Litigation Scholar.

Emily is admitted to practice in Illinois. 

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Turley, MWE, Portrait
Partner

Erin Turley focuses her practice on employee benefits matters. She has extensive experience handling issues pertaining to the Employee Retirement Income Security Act of 1974 (ERISA) and employee stock ownership plans (ESOPs).

With respect to ERISA, Erin focuses on employee benefits, including qualified, nonqualified, and executive and deferred compensation and welfare benefit plans, as well as on regulatory compliance with the Internal Revenue Code, ERISA, the Consolidated Omnibus Budget Reconciliation Act (COBRA), the Health Insurance Portability and Accountability Act (HIPAA) and...

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Judith Wethall, McDermott Law Firm, Chicago, Labor and Employment Law Attorney
Partner

Judith Wethall focuses her practice on employee benefits, specifically health and welfare programs. She counsels employers, plan administrators, insurers and consultants on a wide range of ERISA compliance issues. Judith's clients include sole proprietors to Fortune 100 companies and cover a variety of industries including health care, technology, manufacturing, insurance and financial.

Judith has extensive experience advising clients on health care law reform; wellness programs; Medicare secondary payor rules; fiduciary compliance; disability...

312-984-7577