EEOC Challenges Wellness Programs

In General, Healthcare Reform by Coolidge Wall

Many employers are implementing wellness programs associated with providing employees health insurance. The EEOC is concerned about wellness programs and has filed at least two complaints this year alleging that an employer’s wellness program violated the Americans with Disabilities Act of 1990.

In the first complaint, EEOC v. Orion Energy Systems, Inc., the employer implemented a wellness program under which the employees were required to complete a health risk assessment that included a physical fitness component. The health risk assessment required that employees disclose their medical history, answer disability-related inquiries, and have blood work performed. One employee objected to participation in the wellness program. The employee declined to participate in the wellness program and was required to pay 100% of her health insurance premium when the employees that participated were not required to pay any premium. She was also required to pay an additional $50 per month penalty. Approximately 2 months after she declined to participate in the wellness program, the employee was terminated.

In the second complaint, EEOC v. Flambeau, the employer began to require employees to complete biometric testing and take a health risk assessment. The testing included a health risk assessment with disability-related questions. One employee was not able to complete the biometric testing and health risk assessment because on the only date the testing was being done, the employee was in the hospital being treated for congestive heart failure. When the employee returned to work he tried to complete the required testing and was not permitted. Thereafter, his health insurance was cancelled and he was told that he could apply for medical insurance at the 102% COBRA premium rate. Employees who participated in the testing were required to pay only 25% of the premium. The employee could not afford the additional premium and lost his health insurance.

The EEOC alleges that both of the wellness programs violated the law because they were not voluntary. The EEOC does not have a formal definition of voluntary. However, it has informally indicated that voluntary means the employer neither requires participation nor penalizes employee who do not participate. The EEOC does not consider a wellness program voluntary if it results in the individual having to pay 100% of the premium, terminating coverage, losing a job or other disciplinary action, or refusing new employees health insurance for not completing the testing.

Neither case referenced the wellness regulations that were issued in 2013 under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and how the regulations would affect a determination of whether a wellness program is voluntary.

We will continue to monitor these cases and any others for additional developments on wellness programs.

By: Edie E. Crump.

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