EEOC Lawsuits Challenge Wellness Programs

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The U.S. Equal Employment Opportunity Commission (EEOC) has charged that two more wellness programs violate the Americans With Disabilities Act (ADA); however, a district judge has denied a temporary restraining order that would have blocked implementation of one of the programs.  The EEOC challenged another program earlier this year.

Here is a link to details about the earlier case:  http://dmec.org/2014/08/22/eeoc-challenges-wellness-program-under-ada/

In the second case filed this year, Flambeau, Inc., a Baraboo, Wis.-based plastics manufacturing company, is alleged to have violated federal law by requiring an employee to submit to medical testing and assessment in connection with a “wellness program” or face dire consequences.  That violated the ADA according to the EEOC.  The “wellness program” required that employees submit to biometric testing and a “health risk assessment,” or face cancellation of medical insurance, unspecified “disciplinary action” for failing to attend the scheduled testing, and a requirement to pay the full premium in order to stay covered, according to the EEOC.

In its lawsuit, the EEOC alleged that when employee Dale Arnold did not complete the biometric testing and health risk assessment, Flambeau cancelled his medical insurance and shifted responsibility for payment of the entire premium cost to him.  The EEOC said employees who had taken the biometric testing and health risk assessment, by comparison, did not have their coverage cancelled involuntarily, and were only required to pay 25% of their premium cost.

The EEOC contends that the biometric testing and health risk assessment constituted “disability-related inquiries and medical examinations” that were not job-related and consistent with business necessity as defined by the ADA.  These alleged actions and severe consequences for not providing prohibited information as part of its “wellness program” violate Title I of the ADA, which prohibits disability discrimination in employment, including making disability-related inquiries.

Earlier hearings by the EEOC on wellness programs revealed that a majority of employers now offer some sort of wellness program – 94 percent of employers with over 200 workers, and 63 percent of smaller ones, according to the Kaiser Family Foundation, which researches issues relating to health care.

In the third challenge to a wellness program, the EEOC has charged that Honeywell’s program violates both the ADA and the Genetic Information Nondiscrimination Act (GINA).  Under Honeywell’s program, employees who refuse to submit to biometric screening will be penalized.  The program measures blood pressure, cholesterol, glucose and checks for nicotine use.  According to the EEOC, Honeywell’s program is involuntary, which means the disability-related inquiries and medical examinations violate the ADA.  The EEOC’s suit also alleges that the program violates GINA’s prohibition against providing inducements to an employee to obtain family medical history.  The EEOC says that by penalizing an employee if his or her spouse does not participate constitutes such an inducement.  The EEOC says that employees not participating would have to pay up to $2,500 in direct surcharges and would lose up to $1,500 in contributions to a health savings account.

Honeywell responded to what it called a frivolous lawsuit, saying “The Chicago EEOC office is unfamiliar with the details of our wellness programs and woefully out of step with the healthcare marketplace and with the core intent of the Affordable Care Act (“ACA”) to provide expanded access and improved healthcare to all Americans.  The incentives in our wellness programs are pro consumer and have delivered demonstrably better healthcare outcomes for employees and their families.  The incentives we provide are specifically sanctioned by two separate Federal statutes – the Health Insurance Portability and Accountability Act (“HIPAA”) and the ACA.  Honeywell’s wellness plan incentives are in strict compliance with both HIPAA and the ACA’s guidelines, which were designed by Congress to encourage healthier lifestyles while helping to control healthcare costs.  No Honeywell employee has ever been denied healthcare coverage or disciplined in any way as a result of their voluntary decision not to participate in our wellness programs.”

Honeywell went on to say: “Biometric testing provides valuable private information to each employee about potentially life threatening issues.  Honeywell wants its employees to be well informed about their health status not only because it promotes their wellbeing, but also because we don’t believe it’s fair to the employees who do work to lead healthier lifestyles to subsidize the healthcare premiums for those who do not.  Biometric information will help all employees make healthier decisions.”  A federal judge has denied the EEOC’s request for a temporary restraining order that would have kept Honeywell from implementing its program.  The judge’s ruling does not address the merits of the case.

These attacks on wellness programs by the EEOC are particularly frustrating to employers because the EEOC has never issued any guidance as to what the ADA and GINA prohibit with regard to wellness programs.  Employers should proceed with caution in implementing wellness programs.

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