Workers Sue Yale University Over Workplace Wellness Penalties

Suit contends that wellness incentives violate ADA and GINA

Stephen Miller, CEBS By Stephen Miller, CEBS July 24, 2019
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A class-action lawsuit on behalf of Yale University's workers alleges that the university's employee wellness program uses financial incentives that violate the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA).

"The rapid expansion in employee wellness programs has come at a price for employees … with a contingent of employers imposing financial penalties on employees who do not participate in these programs, despite growing evidence that imposing penalties does not improve programs' effectiveness," according to the class complaint filed July 16 in the U.S. district court in Connecticut.

The suit, brought with the AARP Foundation, a charitable affiliate of AARP, charges that Yale's Health Expectations program requires approximately 5,000 union employees and their spouses to submit to medical tests and to allow release of their insurance claims data to wellness vendors. Employees who don't participate face a penalty of $1,300 per year, the suit alleges.

The ADA and GINA generally prohibit disclosing an employee's health- and genetic-related information. Both laws, however, contain an exception, permitting the collection of such information as part of employer wellness plans as long as an employee provides the information voluntarily. Workers have charged that a sizeable financial incentive or penalty to participate renders wellness programs involuntary.

"Under federal law, disclosing medical and genetic information and test results in workplace wellness programs must be voluntary," said William Alvarado Rivera, senior vice president of litigation at AARP Foundation. "Workers should have the freedom to choose whether to divulge personal health information in the workplace, as Congress intended."

Added AARP Foundation President Lisa Marsh Ryerson, "This is a particularly important issue for older workers, who are more likely to have disabilities and medical conditions—such as diabetes, heart disease and cancer—that are at risk of being revealed by wellness questionnaires and exams."

[SHRM members-only toolkit: Designing and Managing Wellness Programs]

Conflicting Statutes

In a suit filed in October 2016, AARP successfully sued the Equal Employment Opportunity Commission (EEOC) to overturn a federal rule that allowed wellness programs to offer incentives or penalties of up to 30 percent of the lowest cost self-only plan the employer offers. Although this amount is permitted under the Affordable Care Act, the federal district court in Washington, D.C., ruled it was coercive under the ADA and GINA to make workers pay much more for health insurance if they decided to protect their private medical information.

Reducing Liability

New EEOC wellness rules are still being developed. In the meantime, employers will have to weigh the risks of offering wellness programs that include financial incentives, said Mathew Parker and Melissa Shimizu, attorneys with Fisher Phillips, in a joint statement. Until the EEOC proposes new rules, they explained, employers may want to reduce wellness program incentives or penalties to an amount that, regardless of an employee's income, could be viewed as small enough for the employee's participation to be considered voluntary.

To lower their risk of being sued further, employers can eliminate any wellness incentive or penalty altogether and wait for further guidance from the EEOC, Parker and Shimizu said.

Wellness program critic Al Lewis, co-founder and CEO of Quizzify, which educates employees about health care issues, called Yale's program "perhaps the single most exemplary conventional wellness program we've ever seen. So, if they can be sued, so can virtually anybody else with high program penalties."

Are Fears Unfounded?

Wellness program advocates say that concerns about misuse of health or genetic information are overblown and that legislation—including the Health Insurance Portability and Accountability Act (HIPAA)—prevents employers from having access to protected health information, which is collected by third-party providers and shared only in aggregate form with employers, without identifying individuals.

Employee advocates critical of wellness programs nevertheless raise fears that employers could, for instance, use blood drawn during biometric health screenings to hunt for genetic markers indicating a likelihood for developing expensive chronic conditions, with an eye to discriminate against or terminate those employees to avoid higher health plan costs. No one, however, has shown evidence that this is happening, supporters of wellness programs say.



Related SHRM Articles:

Wellness Platforms Provide Flexibility, Raise Data-Privacy Concerns, SHRM Online, July 2019

Viewpoint: 3 Questions to Ask Wellness Program Providers, SHRM Online, July 2019

Wellness Programs Are in Limbo Without EEOC Regulations, SHRM Online, May 2019

Bill to Harmonize Wellness Program Requirements May Have Stalled, SHRM Online, April 2017


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