Zoom in on Court Decisions and Settlements

DC Judge: EEOC Must Reconsider Rules on Employer Sponsored Wellness Programs

A judge in the U.S. District Court for the District of Columbia issued a memorandum opinion in the case of AARP v EEOC, requiring the agency to reconsider its rules related to employer sponsored wellness programs under both the ADA and the Genetic Information Nondiscrimination Act (GINA).

The rules, which went into effect in January of this year, allow employers to penalize workers up to 30% of the cost of their health insurance premiums if they decline to participate in wellness programs that require them to undergo medical testing or answer questions about their health. Such programs are only permissible under the ADA if they are “voluntary.”

The level of incentive (either a reward or a penalty) that would preserve the voluntary nature of a program – in other words, an incentive not so great or so burdensome that it leaves workers with little meaningful choice – is at the center of the debate in this case.

One of the primary reasons the EEOC offered to justify the 30% level was to harmonize ADA and GINA regulations with those of the Health Insurance Portability and Accountability Act (HIPAA), which allows the use of just such an incentive level in some cases.

However, the Court pointed out that the application of the 30% rule under HIPAA is significantly different from the way the EEOC chose to apply it in the context of the ADA and GINA. Additionally, the court noted that the 30% level in HIPAA was “adopted in a different statute based on different considerations and for different reasons,” and was “not intended to serve as a proxy for or interpretation of the term ‘voluntary.’” (The court pointed out that “[w]hether an individual’s participation in a wellness program is voluntary is not an issue under [HIPAA]”).

The judge also said the EEOC did not adequately justify the reasoning for the 30% level, and seemed to ignore members of the public who expressed serious concerns about it during the rulemaking process. Penalties based on the 30% level could range from several hundred to several thousand dollars a year for individual workers, and commenters had pointed out that imposition of such penalties “would double the cost of health insurance for most employees” and amount to the “equivalent of several months’ worth of food for the average family, two months of child care in most states, and roughly two months’ rent.”

Having chosen to define “voluntary” in financial terms – 30% of the cost of self-only coverage – the [EEOC] does not appear to have considered any factors relevant to the financial and economic impact the rule is likely to have on individuals who will be affected by the rule.
~ U.S. District Court for the District of Columbia

Despite what the Court described as the “EEOC’s failure to engage meaningfully with the text and purpose of the ADA,” the Court decided that simply vacating the rules, which have already been in effect for many months, would likely create “widespread disruption and confusion.” Therefore, the EEOC must reconsider the rules.

Settlement Agreement: Bieber Tourways

The U. S. Department of Justice (DOJ) entered this settlement agreement with Bieber Tourways, a large, fixed-route transportation operator based in Pennsylvania. Such operators were required to ensure a 100% level of accessibility to bus fleets used for fixed-route services by 2012.

ADA compliance reviews conducted by the Federal Motor Carrier Safety Administration (FMCSA) in 2013 and 2014, as well as documents produced by the company in response to a request from DOJ in 2016, revealed that the company was using inaccessible buses on its fixed routes. For example, the company indicated inaccessible buses were used on fixed routes nearly half the time in June of 2016.

Bieber Tourways will ensure that only accessible buses are used for its fixed route services by January of 2018. The company will also revise its procedures, train its staff, and pay a $20,000 civil penalty to the United States.