January 17, 2018 – Compliance Observer Alert – Judge Vacates EEOC Wellness Rules

Compl Obs Header Alert_2016

January 17, 2018

Judge Vacates EEOC Wellness Rules

In AARP v. EEOC, federal district court Judge John Bates concluded that the Equal Employment Opportunity Commission (EEOC) had failed to adequately justify its reasoning that incentives and penalties of up to 30 percent of the cost of an employee’s health insurance coverage does not render wellness plan participation “involuntary”. In the case, Judge Bates ordered the agency to re-evaluate its position and provide, within a month, a schedule for its reconsideration of the rules. The EEOC did respond in September with what the court deemed an unhurried schedule in complying with the order. Judge Bates, therefore, vacated the EEOC rule effective January 1, 2019.  He further ordered the EEOC to promulgate any new proposed rules by August 31, 2018, and to report back on its schedule for rulemaking by March 30, 2018.

For now, the EEOC’s final wellness rules remain in place. However, unless we have new EEOC rules, beginning January 1, 2019 the current final rules’ guidance on permissible incentive limits for wellness programs that involve medical exams (screenings) or inquiries (many health risk assessments) will no longer apply, and although the wellness rules under HIPAA and ACA continue to allow incentives of up to 30% (50% for tobacco), employers will once again be in a position of uncertainty as to “What is voluntary?” under the ADA and/or GINA. Due to this legal uncertainty, employers should carefully consider the level of incentives they implement for their 2019 wellness programs.

AssuredPartners will continue to monitor all developments related to the EEOC’s wellness plan rules and will communicate any new information as soon as it is known.

Should you have any questions or concerns please contact your AssuredPartners Benefits Team

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