Yale to settle wellness program opt-out fee suit for $1.2M

Dive Brief:

  • Yale University will pay $1.29 million to settle a class-action lawsuit alleging the school operated a wellness program it forced workers to take part in by requiring a $25 opt-out fee. The plaintiffs were represented by AARP, which announced the settlement March 7.
  • Yale’s opt-out fee violated the Americans with Disabilities Act and the Genetic Information and Non-Discrimination Act, the plaintiffs charged. The university implemented the program in partnership with two unions at a time when federal regulations authorized opt-out fees, AARP said. But the regulations were later invalidated.
  • As part of the settlement, Yale will continue to offer the wellness program but drop the opt-out fees. Its payout will be split among workers covered by the program and will apply to legal fees.

Dive Insight:

AARP has gone to court over the voluntary nature of wellness programs before. The organization sued the U.S. Equal Employment Opportunity Commission over wellness incentive rules in 2016, when it claimed that extensive incentives threatened those who didn’t want to provide health information wellness programs typically require.

The lawsuit set off a yearslong legal battle. The agency eventually rescinded the ADA and GINA regulations in December 2018, a month before they were due to sunset. In a 2017 decision, a judge ordered the agency to reconsider the rules. The judge took specific issue with EEOC’s decision to allow plans and insurers to offer a large incentive for joining wellness programs. Such incentives, which EEOC said could amount to 30% of the cost of coverage, clashed with the requirement that wellness programs be voluntary — a large point of AARP’s original lawsuit.

EEOC took another swing at its wellness regs in 2021, publishing its new proposal Jan. 7. The agency proposed that employers be able to offer only a “de minimis incentive” to encourage participation in the programs. Before the comment period could end, however, the Biden administration froze and withdrew the regulations.

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