Workers Sue Employer Over Wellness Program Participation Incentives

July 19, 2019

Three Yale University employees have sued the school over its $1,300 per year incentive to participate in a wellness program, alleging the “fine” for opting out of the program makes it involuntary and therefore a violation of the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act.

Background:  In August 2017, a federal court struck down the Equal Employment Opportunity Commission’s (EEOC) 2016 wellness rules that allowed employers to offer incentives, whether in the form of rewards or penalties, of up to 30 percent of the cost of self-only health care coverage to encourage employee participation in a wellness program.  In January 2019, per a court order, the EEOC withdrew its wellness program rules and could not replace them since it lacked a quorum to do so until last month.  The EEOC has previously announced that it will propose new rules in December 2019.

Court enforcement based on lack of previous regulations?  According to the AARP Foundation, the lawsuit is intended “to enforce what the law is now after the 2016 regulations were struck down,” but prior to 2016 there were no regulations or guidance, and only a few court cases that drew criticism from both sides of the aisle in Congress and from the Obama administration.

Takeaway:  More of these types of opportunistic lawsuits can be expected until the EEOC publishes new rules regarding wellness programs, which are expected in December 2019.