Yale Sued Over Wellness Program ‘Penalty’

Jul 18 2019

As it appeared in the PlanSponsor
The lawsuit says the so-called “incentive” Yale offers for participating in the wellness program are in fact a “penalty” that violates non-participants’ right, and it notes that the Equal Employment Opportunity Commission (EEOC) withdrew the incentive portions of its wellness program rules.

By Rebecca Moore

Employees of Yale University have filed a class action lawsuit on behalf of all current and former employees of Yale who are or were required to participate in Yale’s Health Expectation Program (HEP) or pay a fine adding up to $1,300 annually between January 1, 2017 and present.

While incentives to participate in wellness programs may encourage participant by employees who want to participate, these incentives are also a “penalty” for those who do not. According to the complaint, the penalty for non-participation in the program is among the highest in the country among large employers, coming in at $25 per week, or $1,300 per year. The lawsuit contends that in New Haven, Connecticut, where Yale is located, $1,300 is equivalent to nearly five and half weeks’ worth of food, four months of utility costs, nearly a months’ worth of housing, or a month’s worth of childcare.

The lawsuit accuses Yale of not only slashing employees’ expected income, but violating their civil rights. It notes that the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA) prohibit employers from extracting medical or genetic information from employees unless that information is provided voluntarily.

The lawsuit goes on to say the $1,300 penalty makes the HEP anything but voluntary. It cites one employee who is a member of one of the unions at Yale that is subject to the HEP, as saying Yale is “forcing” union members to do “something they don’t want to do” and “financially penalizing them if [they] don’t do it.” Another union member explains that he would prefer not to participate but “can’t throw away $25 [per week] to keep [his] information private.”

“The weekly penalty imposed by Yale has a coercive effect on its employees, forcing them to either pay a fine to protect their civil rights or participate in a wellness program against their will. That is a violation of the ADA and GINA,” the complaint says.

In 2016, the Equal Employment Opportunity Commission (EEOC) issued final regulations governing employee wellness programs’ compliance with the ADA and GINA. The final ADA rule stated that wellness programs that are part of a group health plan and that ask questions about employees’ health or include medical examinations may offer incentives of up to 30% of the total cost of self-only coverage. The final GINA rule said the value of the maximum incentive attributable to a spouse’s participation may not exceed 30% of the total cost of self-only coverage, the same incentive allowed for the employee.

The AARP, in 2017, filed a lawsuit alleging that the EEOC’s final wellness program rules are arbitrary, capricious, an abuse of discretion, and not in accordance with law. The AARP asked that the rules be invalidated. In 2018, the U.S. District Court for the District of Columbia vacated the incentive portions of the wellness program rules. However, the judge issued a stay on his decision until January 1, 2019. According to his opinion, the court “will also hold EEOC to its intended deadline of August 2018 for the issuance of a notice of proposed rulemaking.”

On December 20, 2018, consistent with the court’s order, the EEOC withdrew the “incentive” portions of the 2016 rules.

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