Questions Linger over Workplace Wellness Rules

The EEOC lost a court fight, but the Trump administration’s new leadership at the agency could have an impact on the revamping of rules.

The U.S. Equal Employment Opportunity Commission lost a fight in court over workplace wellness rules but there are still questions lingering over a solution—particularly given the Trump administration’s new leadership at the agency could shift intentions.

In August, a federal judge in Washington sided with the AARP in a lawsuit that challenged rules that would allow employers to incentivize or penalize employees for programs targeted at improving health. Such programs have become increasingly popular at companies because a healthy workforce can lower insurance costs.

In an unusual move, the judge did not vacate the wellness rules, but rather gave the agency the chance to redo them. This left open questions about how long it would take the agency to recraft the rules. The EEOC and the AARP have spent weeks now arguing back and forth about the best approach.

The agency argues that vacating the rules entirely would leave companies scrambling and 170,000 enrollment guides would have to be tossed out. The AARP argues that any delay essentially allows the rules—which the court said would allow employers to illegally access private health information and violate federal discrimination laws—to be in place for years.

A recent report from the agency suggested one plan that would create new regulations by October 2019, and those rules would be implemented in 2021.

U.S. District Judge John Bates of the District of Columbia refused to outright vacate the EEOC’s rules, saying that such a move would be “disruptive” to companies. The AARP has suggested it would be possible for companies to comply with new regulations by 2018.

In the backdrop of this debate is the new makeup of the EEOC. Two likely new EEOC members—chair nominee Janet Dhillon, former general counsel to Burlington Stores Inc., and Daniel Gade, a former Iraq veteran—will shift the majority of the commission to Republican control. Dhillon and Gade appeared last week in the U.S. Senate for their confirmation hearings.

The AARP’s Dara Smith points out in her brief to the court, “The EEOC identifies several factors each of which may very well extend the length of the rulemaking process beyond this tentative schedule: the commission’s changing composition, the possibility of a stay pending appeal, and other necessary administrative processes.”

The EEOC’s proposal, according to the AARP’s court filing last week, would “permit employers to violate workers’ civil rights for at least three more years. While the agency surely needs time to complete a new rulemaking, employees and their families must not suffer the consequences in the interim,” Smith wrote.

The EEOC, represented by the U.S. Justice Department in the lawsuit, acknowledged last week that the agency’s “intentions could change” amid new leadership.

 

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