Employment & Labor Insider

A federal judge in the District of Columbia has denied the AARP's request for a preliminary injunction against the wellness rules issued by the Equal Employment Opportunity Commission last May. As a result, the EEOC rules -- which establish when participation in an employer-sponsored wellness program is "voluntary" within the meaning of the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act -- become applicable to health plans with anniversary dates that occur on or after January 1, 2017.

I have covered the wellness rules here, and the AARP lawsuit here.

Judge John D. Bates found that the AARP had standing to sue on behalf of its members but failed to meet its burden of establishing any of the other grounds for a preliminary injunction: (1) irreparable injury to its members, (2) likelihood of success on the merits, (3) that the "balance of equities" weighed in favor of the AARP, or (4) that a preliminary injunction would serve the public interest.

The most important part of the court's decision is the finding that the AARP had not shown that it was likely to succeed on the merits of its challenge to the EEOC rules. Judge Bates noted that the AARP was not objecting to all wellness incentives but arguing only that the EEOC's limit for incentives was too high. But setting the level of the limit was arguably within the EEOC's discretion, he said, and using the 30 percent limit for incentives in the Affordable Care Act changes to the Health Insurance Portability and Accountability Act was "not irrational." He also found that the EEOC had arguably provided an adequate explanation for its decision to adopt the 30 percent limit -- that is, trying to harmonize the provisions of the ADA and the GINA with the HIPAA/ACA requirements.

The denial of a preliminary injunction is not a final decision. Judge Bates was careful to point out that he was finding only that the AARP failed to meet its burden for justifying a preliminary injunction: "To be clear, the Court is not concluding that the [EEOC] has shown a substantial likelihood of success." (Emphasis in original.) He noted more than once that he did not have the full administrative record related to the rules because the AARP had waited so long to file suit. Judge Bates said,

This case raises important questions about the complex interaction of the ADA, GINA, the ACA, and HIPAA that implicate the public interest on all sides, and the Court will  have the opportunity to consider these questions carefully once the administrative record has been produced and further briefing ensues."

In other words, it is possible that the court will invalidate the rules once the record and evidence are fully developed. But until further notice, employers can proceed with their EEOC/HIPAA/ACA-compliant wellness incentives.