Aarp v. U.S. Equal Emp't Opportunity Comm'n

• Decision Date: 29 December 2016
• Docket Number: Civil Action No. 16–2113 (JDB)
• Citation: 226 F.Supp.3d 7
• Parties: AARP, Plaintiff, v. UNITED STATES EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Defendant.
• Court: U.S. District Court — District of Columbia

226 F.Supp.3d 7

AARP, Plaintiff,

v.UNITED STATES EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Defendant.

Civil Action No. 16–2113 (JDB)

United States District Court, District of Columbia.

Signed December 29, 2016

Daniel Benjamin Kohrman, Dara S. Smith, AARP Foundation Litigation, Washington, DC, for Plaintiff.

Steven A. Myers, Tamra Tyree Moore, U.S. Department of Justice, Washington, DC, for Defendant.

MEMORANDUM OPINION

JOHN D. BATES, United States District Judge

Before the Court is AARP's motion for a preliminary injunction to prevent new regulations promulgated by defendant, the U.S. Equal Employment Opportunity Commission (EEOC), from becoming applicable on January 1, 2017. See Pl.'s Mot. for Prelim. Injunction [ECF No. 2]. EEOC has promulgated two sets of regulations under statutes it administers, one under Title I of the Americans with Disabilities Act (ADA), see Regulations Under the Americans with Disabilities Act ("the ADA rule"), 81 Fed. Reg. 31,126 (May 17, 2016), and one under Title II of the Genetic Information Nondiscrimination Act (GINA), see Regulations Under the Genetic Information Nondiscrimination Act ("the GINA rule"), 81 Fed. Reg. 31,143 (May 17, 2016). Both address the incentives that employers may offer employees for participating in healthcare wellness programs. Many such wellness programs require employees to complete a health risk assessment form or undergo biometric screenings for risk factors, which may require employees to reveal information protected under either the ADA or GINA. The new regulations promulgated by EEOC would permit employers to increase premiums for employee self-only coverage by up to 30% if employees choose not to participate in employer sponsored wellness programs that solicit ADA- or GINA-protected information. The ultimate merits question in this case is whether EEOC's regulations permitting such incentives are arbitrary and capricious under the Administrative Procedure Act (APA) because, according to AARP, the incentives render the disclosure of GINA- and ADA-protected information "involuntary" and thus permit coerced disclosure in violation of the governing statutes. AARP has moved for a preliminary injunction to enjoin the applicability¹ of these regulations pending the Court's resolution of the merits. For the reasons that follow, the motion for a preliminary injunction is denied.

I. BACKGROUND

This case concerns the complex intersection of the Americans with Disabilities Act (ADA), the Genetic Information Nondiscrimination Act (GINA), the Health Insurance Portability and Accountability Act (HIPAA), the Affordable Care Act (ACA), and their various implementing regulations, as applied to employer-sponsored wellness programs. Such programs have become increasingly popular in recent years as a means of decreasing the cost of healthcare by promoting and improving overall health in the insured population. They vary widely in specific purpose and design, but wellness programs may include, for example, programs to help employees quit smoking, weight loss programs, and preventative health screenings. See, e.g. , Healthcare.gov, Wellness Programs, https://healthcare.gov/glossary/wellness-programs [https://perma.cc/4Y65–QTYR]. As noted above, such programs often involve collecting medical information from employees, including information about disabilities or genetic information, in order to assess health risk factors. Before reaching the arguments on the motion for a preliminary injunction, a brief discussion of the statutory and regulatory framework governing these wellness programs is in order.

A. THE ADA, GINA, AND HIPAA

Title I of the ADA bars employers from requiring medical examinations or inquiring as to whether an individual has a disability unless the inquiry or examination is job-related and "consistent with business necessity." 42 U.S.C. § 12112(d)(4)(A). However, an employer may conduct voluntary medical examinations, including voluntary medical histories, as part of an "employee health program." Id. § 12112(d)(4)(B). The term "voluntary" is not defined anywhere in the statute. Likewise, Title II of GINA provides that an employer may not request, require, or purchase genetic information of an employee or the employee's family members. 42 U.S.C. § 2000ff–1(b). Genetic information is defined to include an individual's genetic tests, the genetic tests of family members (including spouses), and the manifestation of a disease or disorder of a family member. See id. § 2000ff(4)(A). As in the ADA, there is an exception to the prohibition on the collection of this information where the employer offers health or genetic services, including wellness programs, as long as the employee's provision of the information is voluntary. Id. §§ 2000ff–1(b)(2)(A)–(B).

HIPAA provides generally that group health plans, including plans offered through an employer, and health insurance issuers may not discriminate on the basis of "any health status related factor"; but covered entities, again including employers, may offer "premium discounts or rebates modifying otherwise applicable copayments or deductibles in return for adherence to programs of health promotion and disease prevention," a.k.a. wellness programs. See 29 U.S.C. § 1182(b)(2)(B) ; 26 U.S.C. § 9802(b) ; 42 U.S.C. § 300gg–4(b). Regulations promulgated jointly in 2006 by the Departments of Labor, Health and Human Services, and the Treasury (collectively known as the tri-departments or the tri-agencies) capped the size of the reward that could be offered for participation in a wellness program at 20% of the cost of employee-only coverage, and defined "reward" to mean a discount or a penalty. See Incentives for Nondiscriminatory Wellness Programs in Group Health Plans ("the 2013 HIPAA regulations"), 78 Fed. Reg. 33,158, at 33,166 –67 (June 3, 2013) (discussing the 2006 regulations). This gave covered entities the ability to increase an employee's premiums by up to 20% if an employee chose not to participate in an employer-sponsored wellness program.

These regulations divided wellness programs into two categories: those that are participatory and those that are health-contingent. Id. at 33,160 –61. Participatory wellness programs either offer no reward or do not include conditions for obtaining a reward that are based on a standard related to a health factor. Examples include programs that reimburse employees for all or part of the cost of a gym membership, or that provide a reward to employees for attending a health education seminar. Id. at 33,161. If a program is health-contingent, rewards are offered when an employee satisfies a standard related to a particular health factor; for example, if the employee successfully maintains a specified "healthy weight" or participates in a program aimed at a specific health factor, like a weight loss program. Id. The 20% cap applied only to health-contingent wellness programs. Id. at 33,167. In 2010, the ACA amended the nondiscrimination provisions of HIPAA to allow for rewards of up to 30% of the cost of coverage in exchange for participation in a health-contingent wellness program, and the tri-departments amended the 2006 regulations in 2013 to account for these legislative changes. Id. at 33,180.

B. EEOC REGULATIONS & POLICY

Because the collection of employee medical information also implicates the nondiscrimination provisions of the ADA and GINA, EEOC has been involved in the regulation of wellness program incentives as well, and its position has evolved over the last several years. Initially, EEOC issued ADA enforcement guidelines in 2000 which stated that the provision of ADA-protected information to an employer as part of a wellness program was "voluntary" "as long as an employer neither requires participation [in the wellness program] nor penalizes employees who do not participate." EEOC Enforcement Guidance on Disability–Related Inquiries and Medical Examinations, No. 915.002 (July 27, 2000), 2000 WL 33407181, at *16–17. In other words, employers could collect ADA-protected information as part of a wellness program, as long as they made clear to employees that providing the information was not a condition of obtaining any offered reward or incentive.

In 2009, EEOC issued a letter implying that it would adopt the tri-departments' reasoning in the 2006 HIPAA regulations and interpret the "voluntariness" requirement of the ADA to allow employers to provide incentives worth up to 20% of the cost of self-only coverage to provide protected information, thus altering its original position. See January 6, 2009 letter, "ADA: Disability Related Inquiries and Medical Exams/Mandatory Clinical Health Risk Assessment," available at http://pdfserver.amlaw.com/cc/WellnessEEOC2009.pdf; see also Chamber of Commerce of the United States of America, Comment Letter on Proposed Rulemaking Under the Americans with Disabilities Act, at 2 (June 19, 2015), https://www.regulations.gov/document?D=EEOC–2015–0006–0273. Shortly thereafter, however, EEOC rescinded the portion of this letter that permitted the use of incentives, concluding that the matter of incentives was not relevant to the question before it. See March 6, 2009 letter, "ADA: Disability Related Inquiries and Medical Examinations/Health Risk Assessment," available at http://pdfserver.amlaw.com/cc/WellnessEEOC2009.pdf, at 5. In 2010, EEOC first promulgated regulations under GINA, see Regulations Under the Genetic Information Nondiscrimination Act of 2008, 75 Fed. Reg. 68,912 (Nov. 9, 2010), which echoed the 2000 ADA Guidance in providing that the provision of genetic information pursuant to a wellness program must be voluntary, "meaning the covered entity neither requires the individual to provide genetic information nor penalizes those who choose not to provide it." Id. at 68,935, codified at 29 C.F.R. §§ 1635.8(b)(2)(i)–(i)(B).

However, against the backdrop of the ACA and the 2013 HIPAA regulations increasing the cap on incentives for wellness...