As reported in our Disability, Leave & Health Management Blog, Judge Ann D. Montgomery of the U.S. District Court for the District of Minnesota denied the EEOC’s TRO request to immediately stop an employer, Honeywell, from implementing its wellness program, ruling that the EEOC did not establish that there would be irreparable harm. Judge Montgomery did not address the EEOC’s likelihood of success in the litigation.

One of the interesting discussions during the hearing related to determining what amount of a monetary penalty will result in employees involuntarily, a key concern of the EEOC. When the Judge posed that question, the EEOC’s lawyers could not provide a clear answer or point to a line that could not be crossed, noting only that Honeywell crossed it.

Many employers remember the mantra during the early stages of the debate over healthcare reform – “bend the cost curve down.” Enhancing the existing rules for wellness program incentives was one of the often cited tools included in the Affordable Care Act (ACA) to help bend that curve down. The Departments of Labor, Health and Human Services and Treasury issued extensive regulations implementing the ACA’s wellness program provisions. However, as employers struggle to design their plans to meet the ACA minimum value and affordability requirements, and also to apply the ACA’s wellness program provisions as intended, they now face a “we know it when we see it” approach from a different federal agency, the EEOC. During the hearing Honeywell pointed to the clear guidance on acceptable incentives for wellness plans and acceptable employee contributions in the ACA, and also pointed to the ADA “safe harbor” that potentially undermines many of the EEOC’s arguments.

It is not clear at this point how this case will turn out, but employers with wellness programs should watch these cases closely.