New rules governing incentives offered as part of employee wellness programs are now the target of a lawsuit from a large advocacy group representing older Americans.

AARP filed the suit against the Equal Employment Opportunity Commission (EEOC) in Federal District Court in Washington, D.C., on October 24, arguing that wellness programs can violate employees’ privacy and may not be truly voluntary.

The Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA) generally prohibit employers from obtaining information about health conditions of employees and their family members, but the laws do allow employers to ask health-related questions and conduct medical examinations if the employer is providing health or genetic services as part of a voluntary wellness program.

30% incentive

Jonathan R. Mook, an attorney with DiMuroGinsberg, PC, in Alexandria, Virginia, says the suit may not “get much traction” because the EEOC’s regulations are in general conformity with what is required under the Health Insurance Portability and Accountability Act (HIPAA).

The new rules from the EEOC, which are to take effect in January, provide that wellness programs that are part of a group health plan and that include medical examinations and ask questions about employees’ and their spouses’ health may offer incentives of up to 30% of the cost of self-only coverage.

Mook says that before the new rules came out, the EEOC had challenged wellness plans that had more draconian requirements than the 30% incentive. The agency argued that the larger incentives made the plans not truly voluntary.

But Mook says given the HIPAA 30 percent rule and the incentives for wellness plans under the Affordable Care Act, the EEOC “didn’t want to be at cross purposes” with other federal efforts to encourage wellness plans.

Mook says employers offer two types of wellness plans—participatory plans in which employees just have to sign up and maybe fill out a health questionnaire and undergo biometric testing, and plans that require employees to achieve certain goals, such as lowering blood pressure or losing weight, in order to receive the incentive.

He says the HIPAA regulations related to the goals plans and didn’t place limits on incentives for the participatory wellness plans. So the 30% limit is likely to be seen as a “rational compromise.”

Voluntary or coercive?

In an October 10 blog post, AARP called the new rules “an about-face” for the EEOC. “Until recently, the EEOC firmly prohibited employers from asking for information about your medical conditions or family medical history unless you provided it voluntarily, which meant employers couldn’t require the information or penalize employees for refusing to provide it,” the post states.

Under the new rules, however, the AARP post says, employees and their spouses can incur large penalties for not filling out medical questionnaires or undergoing medical screenings. “In short, the new rules will now consider action ‘voluntary’ even if the employee faces penalties of thousands of dollars. Most people would call that coercive, not voluntary,” the post states.

In announcing the new rules in May, the agency said that they “make clear that the ADA and GINA provide important protections for safeguarding health information.” The rules state that information from wellness programs may be disclosed to employers only in aggregate terms.

Tammy Binford writes and edits news alerts and newsletter articles on labor and employment law topics for BLR web and print publications. In addition, she writes for HR Hero Line and Diversity Insight, two of the ezines and blogs found on HRHero.com.