AARP v. United States Equal Employment Opportunity Commission

Employer-sponsored health-insurance plans implemented employee wellness programs and offered incentives for employee participation. Under the Health Insurance Portability and Accountability Act (HIPAA), a health plan could implement a penalty or incentive of up to 30 percent of the plan’s coverage costs based on an employee’s nonparticipation or participation in a wellness program, which involved collecting sensitive medical information like disability status and genetic background. The Americans with Disabilities Act (ADA) prohibited employers from inquiring about employees’ disability statuses or requiring employees to undergo medical examinations. The Genetic Information Nondiscrimination Act (GINA) prohibited employers from requesting or requiring the disclosure of employees’ genetic information or backgrounds. However, both statutes provided an exception for employee wellness programs to seek protected information if employee participation in such programs was voluntary. Neither statute defined the terms that made a program voluntary. The United States Equal Employment Opportunity Commission (EEOC) (defendant) was empowered to issue ADA and GINA implementation regulations, including those concerning employee wellness programs. The EEOC’s initial regulations stated that a wellness program was not voluntary if employees had to disclose protected information to receive health-plan incentives. However, the EEOC eventually issued new regulations stating that an incentivized wellness program was considered voluntary if the conditional penalty or incentive was under 30 percent of the plan’s coverage cost. Some comment letters received by the EEOC encouraged the proposed rule, but most were against the rule. The nonprofit organization AARP (plaintiff) filed an Administrative Procedure Act (APA) challenge to the EEOC’s new regulations, claiming that the 30 percent wellness-program penalties and incentives violated the voluntary-participation requirements of the ADA and GINA. The AARP argued that employees who could not afford the 30 percent cost difference would be effectively forced to disclose protected information. Both parties moved for summary judgment.