The Affordable Care Act—Countdown To Compliance For Employers, Week 4: EEOC v. Honeywell And The Future Of Wellness Programs

 
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While my entries have focused principally on the employer shared responsibility rules of the Affordable Care Act (ACA), every once in a while an item comes along that nevertheless grabs my attention. The treatment of wellness plans at the hands of the Equal Employment Opportunity Commission (EEOC) is such an item.

The problem, put simply, is that without telling anyone what the rules are, the EEOC has begun to challenge a subset of popular wellness programs, the design of which is expressly sanctioned by the ACA. Of course, simply because a wellness program satisfies one Federal law does not mean that another may not also apply. A pension plan that satisfies ERISA, for example, may nevertheless fail to satisfy the tax qualification requirements of the Internal Revenue Code (the "Code"). What is different here is the insistence of the EEOC to push ahead with enforcement compliance while at the same time obstinately refusing (following a deluge of requests from industry and other groups as well as damning adverse judicial precedent) to issue regulations.

For a while it seemed that the EEOC, perhaps sensing that the lack of guidance put us at a disadvantage, limited its enforcement efforts to a handful of egregious cases, hoping perhaps that bad facts might make good law. But then came EEOC v. Honeywell, No. 0:14-04517 (D. Minn. 2014), where the EEOC took on a mainstream wellness program sponsored by Honeywell International, Inc. One can only imagine their surprise when Honeywell failed to roll over and instead decided to fight back. (We explain the particulars of these cases in previous posts available here and here.

Spoiler alert: things did not go well (at least so far) for the EEOC. And, despite that the case is only getting started, our sense is that the outcome will not fit the EEOC's picture of a raging success. In making this prediction, we don't for a moment claim that wellness programs raise no legitimate ADA issues. They do. Nor do we claim that the ACA's wellness program imprimatur should require the EEOC to abdicate its role as the ADA's principal enforcer. The EEOC shouldn't. But the EEOC's attempts to randomly enforce its views of how wellness programs should be regulated without telling anyone what the rules are strikes us as irresponsible—reminiscent of Dean Wormer's "double secret probation" imposed on the members of the Delta Tau Chi fraternity of Animal House fame.

Background

Wellness Programs Under the ACA

Wellness programs, at least those that form part of employer-sponsored group health plans, have become commonplace. While wellness programs can take a number...

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