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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.

© 2017 McDermott Will & Emery

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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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D. Finn Pressly focuses his practice on employee benefits compliance, with a particular focus on health and welfare plans. He has extensive experience counseling clients on issues related to plan design; summary plan descriptions; all aspects of health care reform; Health Insurance Portability and Accountability Act (HIPAA) privacy and security compliance; health care continuation (COBRA) administration; subrogation and claims reimbursement issues; wellness program design; state-law temporary disability laws; and consumer driven health care initiatives (including health savings accounts and health reimbursement arrangements).

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

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

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