Judge rejects legal challenge to EEOC wellness program rule

Dive Brief:

  • A federal judge let stand a rule permitting employers to penalize workers who refuse to disclose health information related to workplace wellness programs, Health Affairs reports.
  • In the Dec. 29 ruling, Judge John Bates of the U.S. District Court for the District of Columbia rejected AARP’s request for a preliminary injunction against the Equal Employment Opportunity Commission’s wellness program rule. The rule allows employers to offer incentives up to 30% of the cost of coverage when workers disclose personal information.
  • As workplace wellness programs have proliferated, concerns have grown about whether they are truly voluntary and whether aggregated data could be used to discriminate against individuals.

Dive Insight:

Under HIPAA, employers can offer workers incentives of up to 20% of the cost of coverage for participating in a wellness program. The ACA upped that amount to 30%.

In an October court filing, AARP alleged that the 30% incentive was coercive and thus such programs would not be voluntary. It also argued that the rule did not adequately protect the privacy of information provided by participants in wellness programs.

The judge disagreed on both counts, allowing the rule to take effect Jan. 1.

The decision comes as the fate of the ACA falls into Republican hands. “It is ironic, therefore, that the case involves a victory for the administration against consumers, rather than against opponents of the ACA,” Timothy Jost wrote in the Health Affairs blog.

Regardless of the ACA’s fate, the shift to value-based care is expected to press forward — and with it, efforts to get consumers to take more responsibility for their own health. A recent report by PricewatershouseCoopers’ Health Research Institute suggests primary care teams organize their practices around consumer needs and preferences.

Wellness programs are becoming the norm in workplaces, but companies and insurers are still determining how to get the most return for their investment. A 2014 RAND report suggested employers can maximize ROI by targeting employees with chronic conditions who pay attention to program costs and commit to following through on program goals.

However, a study published a year ago in Health Affairs found an incentive valued at $550 didn’t help workers in a company wellness program lose weight. The researchers concluded that employers need to apply behavioral economics — the idea that people respond better to incentives that are immediately apparent — to improve results.

Filed Under: Payer Health Law Policy & Regulation Practice Management
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