AARP v. United States EEOC

AARP v. United States EEOC

Opinion

 [*18]  MEMORANDUM OPINION

This case concerns AARP's Administrative Procedure Act (APA) challenge to two regulations promulgated by the U.S. Equal Employment Opportunity Commission (EEOC) related to incentives and employer-sponsored wellness programs. See Regulations Under the Americans with Disabilities Act ("the ADA rule"), 81 Fed. Reg. 31,126 (May 17, 2016); Regulations Under the Genetic Information Nondiscrimination Act  [*19]  ("the GINA rule"), 81 Fed. Reg. 31,143 (May 17, 2016). In December 2016, this Court denied AARP's motion for a preliminary injunction to stay applicability of the rules, and the new regulations became applicable on January 1, 2017. See generally AARP v. EEOC, 226 F. Supp. 3d 7 (D.D.C. 2016) (AARP I). EEOC has now filed [31] a motion to dismiss/motion for summary judgment, and AARP has [**2]  filed [35] a cross-motion for summary judgment. For the reasons that follow, EEOC's motion to dismiss/motion for summary judgment will be denied, and AARP's motion for summary judgment will be granted.¹

I. BACKGROUND

This case deals with the incentives—financial or otherwise—that may be offered to employees in connection with employer-sponsored wellness programs, which have become popular in many work places in the last several years as a means of promoting employee health and reducing healthcare costs. The central issue here results from the tension that exists between the laudable goals behind such wellness programs, and the equally important interests promoted by the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA). EEOC is tasked with reconciling these competing concerns, and this case arises out of its most recent attempt to do so.

In its previous opinion, the Court discussed at length the complex regulatory and statutory framework that governs this case; thus, a shorter review will suffice here. See AARP I, 226 F. Supp. 3d at 11-15. Wellness programs are regulated in part by the Health Insurance Portability and Accountability Act (HIPAA), as amended by the Affordable Care Act (ACA) [**3] , as well as by HIPAA's implementing regulations. HIPAA prevents health plans and insurers from discriminating on the basis of "any health status related factor," but allows covered entities to offer "premium discounts or rebates" on a plan participant's copayments or deductibles in return for that individual's compliance with a wellness program. See 29 U.S.C. § 1182(b)(2)(B); 26 U.S.C. § 9802(b); 42 U.S.C. § 300gg-4(b). A "reward" or incentive may include a discount on insurance costs or a penalty that increases the plan participant's costs because of non-participation in the wellness program. See 26 C.F.R. § 54.9802-1(f)(1)(i). The ACA's amendments to HIPAA, and the accompanying implementing regulations, allow plans and insurers to offer incentives of up to 30% of the cost of coverage in exchange for an employee's participation in a health-contingent wellness program, a kind of wellness program in which the reward is based on an insured individual's satisfaction of a particular health-related factor. See Incentives for Nondiscriminatory Wellness Programs in Group Health Plans ("the 2013 HIPAA regulations" or "2013 HIPAA rule"), 78 Fed. Reg. 33,158, 33,180. Neither the ACA nor the 2013 HIPAA regulations impose a cap on incentives that may be offered in connection with participatory wellness [**4]  programs, which are programs that do not condition receipt of the  [*20]  incentive on satisfaction of a health factor. Id. at 33,167.

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.