Legal Challenges to Wellness Incentives

by Michael R. Lied
Howard & Howard PLLC

By way of background, on May 17, 2016, the Equal Employment Opportunity Commission (EEOC) published a final rule entitled “Genetic Information Nondiscrimination Act” (GINA). The rule addressed the extent to which an employer may offer an inducement to an employee for the employee’s spouse to provide their current health status information as part of a health risk assessment administered in connection with an employee-sponsored wellness program. 

The AARP filed a complaint in the U.S. District Court challenging the incentive section of the rule. One challenge alleged the EEOC had failed to demonstrate how offering employees discounts of up to 30 percent of their health coverage (or imposing penalties of up to 30 percent) would still allow the wellness programs to truly be considered voluntary. 

The court concluded that the EEOC failed to provide sufficient reasoning to justify the incentive limit adopted in the GINA rule and remanded the rule to the EEOC for further consideration. The court later issued an order vacating the incentive section of the rule, effective January 1, 2019. Consistent with that decision, the EEOC removed the incentive section of the GINA regulation.

Despite this rescission, other wellness program rules remain in effect—and have been the subject of enforcement action. The Affordable Care Act/HIPAA wellness program rules remain in effect and contain their own provisions regarding incentives. Employers should consult with competent counsel to assure their wellness programs do not violate the law.

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