AARP sues U.S. agency over employee wellness programs

(Reuters) - A lobbying group representing older Americans sued the Obama administration on Monday claiming regulations for programs designed to rein in employee health care costs will subject workers to invasions of their medical privacy.

Rules released in May by the U.S. Equal Employment Opportunity Commission will force workers to choose between hefty financial penalties or revealing sensitive health information to employers, AARP, formerly the American Association of Retired Persons, said in a lawsuit filed in federal court in Washington.

Wellness programs have become increasingly popular among employers in recent years. They can take many forms including companies providing incentives to workers to quit smoking, lose weight or undergo preventive health screenings. Workers who participate in the programs are often asked to divulge confidential medical information, which is typically illegal otherwise.

The EEOC rules, which take effect next year, say employers can offer workers incentives worth up to 30 percent of the cost of their cheapest individual health insurance plans, or 60 percent for couples, to participate in wellness programs without violating federal anti-discrimination laws.

But in Monday’s lawsuit, AARP said such incentives are really penalties for workers who are leery of sharing their medical information and render the programs involuntary in violation of federal law.

“Congress enacted these protections to prevent employers from discriminating and to combat stigma in the workplace against individuals with disabilities,” AARP said in the lawsuit.

The EEOC did not immediately respond to a request for comment.

AARP said it was suing on behalf of the one-third of its nearly 38 million members who are employed or looking for work.

The 2010 Affordable Care Act allowed U.S. employers to increase the incentives they offer to employees to participate in wellness programs. But in a series of 2013 lawsuits against employers including Honeywell International Inc, the EEOC claimed incentive-based wellness programs were illegal.

The commission came up with the regulations amid criticism from businesses and Republicans in Congress and after a federal judge in 2014 dismissed the lawsuit against Honeywell, saying the EEOC had not made clear how employers could offer the programs without breaking the law.

But some trade groups were still not satisfied with the rules and said they conflicted with regulations put out by other federal agencies.

The case is AARP v. Equal Employment Opportunity Commission, U.S. District Court for the District of Columbia, No. 1:16-cv-02113.

Reporting by Daniel Wiessner in Albany, New York, Editing by Alexia Garamfalvi and David Gregorio