Federal Judge Denies Request to Delay EEOC Wellness Rules | February 1, 2017

Dan Kuperstein

ComplianceMINUTE | Dan Kuperstein | ERISA Penalties Increase for Form 5500 Violations!
In AARP v. EEOC, a federal district court in D.C. refused to halt new EEOC wellness rules that went into effect on January 1, 2017. Benefits compliance Attorney Dan Kuperstein explains the effect this ruling may have on employers, and what may come next.

Resource: AARP Complaint
Resource: AARP v. EEOC Opinion and Ruling

 
 

Video Transcript: 
Hi, I’m Dan Kuperstein, and welcome to ComplianceMINUTE.

On December 29, 2016, a federal district court in D.C. refused to halt new EEOC wellness rules that went into effect on January 1, 2017.

Specifically, the court in AARP v. EEOC denied AARP’s request for a preliminary injunction of the new rules because it found that AARP had not demonstrated that it was likely to win the case on the merits or show that its members would suffer irreparable harm if the rules took effect.

The AARP had alleged that the new rules, issued under both the ADA and GINA, which tie participation in wellness programs to financial incentives that total as much as 30% of the cost of the self-only tier of medical coverage, are coercive to older employees. The AARP also raised concerns that older workers would face discrimination if they did not provide their private medical information to the plan.

What are the key takeaways here for employers? Well, even though the lawsuit is technically not over, and the AARP is likely to keep on fighting on this issue, the issue is really more of a non-issue for most employers.

While the AARP lawsuit received a lot of attention by attorneys and commentators in the benefits world, most employer wellness incentives never get anywhere close to 30% of the self-only premium, and could hardly be labeled coercive to their workers.

According to a Kaiser Family Foundation survey, the average annual premium for employee-only coverage in 2016 was $6,435. At that price, a wellness plan could have a maximum incentive or surcharge of $1,930, and most employers will never get that high.

According to a survey by the National Business Group on Health, a membership organization representing large employers, in 2016, half of the employers surveyed offered workers incentives of less than $600 annually for participating in a wellness plan.

For more information on this and other ACA topics, visit our Knowledge Center at corpsyn.com. Thank you.