That Extra Incentive

Posted on Categories Business Regulation, Federal Civil Litigation, Health Care, Labor & Employment Law, Public

Most of us are familiar with wellness programs—programs sponsored by our employer or health plan that try to incentivize us to eat healthier, sleep well, and get more exercise.  If you’re anything like me, it helps to have that extra push or incentive, especially around the holidays when sweets abound, to stay on track—or at least, to not stray too far from health goals. Most of these programs have the added advantage of lowering health care costs, both by providing financial incentives to reduce immediate costs to the individual employees and by boosting the overall health of the employees as a whole, which could reduce future health care costs.   However, extensive technical regulations and recent litigation by the AARP make implementing health and wellness programs increasingly tricky for employers.

Title II of the Genetic Information Nondiscrimination Act of 2008 (“GINA”) and the regulations promulgated by the U.S. Equal Employment Opportunity Commission (the “EEOC”) thereunder, generally prohibit “an employer [from] request[ing], require[ing], or purchas[ing] genetic information [which includes an individual’s family medical history] with respect to an employee or a family member of the employee.”  42 U.S.C. § 2000ff–1(b). However, there is an exception for wellness programs, as long as employers jump through a set of hoops. 29 CFR § 1635.8(b)(2).  While not without its own problems and excesses, the exception in the EEOC regulations at least allows employers to provide incentives to those employees willing to participate in employer-sponsored wellness programs.

The AARP doesn’t like this whole “incentive” idea to begin with. It recently filed a lawsuit against the EEOC in an attempt to vacate the regulations entirely.  AARP v. U.S. Equal Employment Opportunity Commission, No. 1:16-cv-02113 (D. D.C. 2016) (hereafter the “AARP Complaint”).  This actually might not be a bad idea, except for the fact that the AARP thinks that the regulations do not have enough hoops.  In fact, the AARP would prefer that the regulations abolish any permission for any incentives or penalties to induce participation in employer-sponsored wellness programs. The AARP alleges in its complaint that all employer incentives or penalties to induce participation in employer-sponsored wellness programs violate Title I of the ADA and Title II of GINA.  AARP Complaint at 3

Now, Title I of the Americans with Disabilities Act (the “ADA”) states that an employer “may conduct voluntary medical examinations, including voluntary medical histories, which are part of an employee health program available to employees at that work site,” 42 U.S.C. § 12112(d)(4)(B), and Title II of GINA permits employer-sponsored wellness programs (including incentives) where “the employee provides prior, knowing, voluntary, and written consent.” 42 U.S.C. § 2000ff-1(b)(2)(B).  The AARP alleges that any employer incentive or penalty for employees violates each statute’s requirement that the program be voluntary. AARP Complaint at 22.  To be truly voluntary, AARP argues, employers cannot use incentives or penalties to promote participation.  AARP Complaint at 24, 26.  The AARP fails to appreciate the fact that such wellness programs—incentives or not—are voluntary. Employees still may choose not to participate without changing their employment status.  Under the AARP’s logic, when a Burger King employee engages in the healthful activity of passing up the opportunity to acquire and consume a complimentary Double Cheeseburger[1] while at work, that’s not voluntary because there is a $1.69 financial “penalty” tied to that “wellness” activity.

The AARP case misses the whole point. The intent of GINA when enacted was not to limit wellness programs, but rather to prevent discrimination against employees in hiring, firing, and other decisions concerning the terms and conditions of employment.  The Ways and Means Committee of the House of Representatives explained in H.R. REP. No. 110-28(II), at 23 (2007), reprinted in 2008 U.S.C.C.A.N. 101, 102, that “advances [in genetics] will also give rise to the potential for the misuse of genetic information to discriminate in the areas of health insurance and employment. Past experience with sterilization laws, as well as examples of current genetic discrimination, have created the need to protect against the misuse of genetic information.” Id. The Committee was further concerned that since “some genetic traits are most prevalent in particular groups, members of a particular group may be stigmatized or discriminated against as a result of genetic information.” Id. at 26, 104.  However, GINA prohibits employers from receiving any personally identifiable health information of their employees in connection with wellness programs, and so wellness programs do not even give rise to the privacy and discrimination concerns behind GINA.

In fact, the Ways and Means Committee was openly worried that an overly expansive regulatory approach with respect to such concerns “may prohibit individuals from taking full advantage of the information that may be available [and thereby] not . . .  receiv[e] the best possible medical care.” Id.  GINA was enacted to encourage individuals and employers to pursue wellness—so long as any genetic information was used only by health professionals during such programs and not by employers when making employment decisions.

If the AARP succeeds and vacates 29 CFR §§ 1630.14(d)(3) and 1635.8(b)(2)(iii) (allowing employee participation incentives under the ADA and GINA, respectively), that does not necessarily mean that employer incentives are automatically abolished, depending on how far the ruling goes.  However, it may leave open the argument for another day that participation incentives of any kind make a wellness program per se involuntary and therefore no longer permissible under the ADA or GINA.  Since the AARP is so adamant that no incentives or penalties are permissible in a wellness program, this action might be the first step in a larger campaign.  A ruling in AARP’s favor could very well have a chilling effect on employers’ willingness to provide wellness programs of any kind to their employees, especially if they cannot incentivize their employees to actually use such services.  And if that happens, we’ll have to look elsewhere for health care cost savings and motivation to stay on track during the holidays.
[1] For the record, I like Burger King Double Cheeseburgers, and have, on occasion, exercised my own free will to acquire (and consume) same.

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