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Employment Blog

EEOC Fails to Claim That a Company’s Wellness Program Violates the ADA

Authored by Ruder Ware Attorneys
Posted on January 7, 2016
Filed under Employment

A federal judge for the U.S. District Court for the Western District of Wisconsin has dismissed a claim by the Equal Employment Opportunity Commission (“EEOC”) that a company’s wellness program violates the American’s with Disabilities Act (“ADA”).  The company, which has a manufacturing facility in Baraboo, Wisconsin, offered to its employees the ability to participate in the company’s health insurance plan on the condition that employees complete a health risk assessment questionnaire (medical history, diet, mental and social health, and job satisfaction) and a biometric test (height and weight, blood pressure test, and a blood draw) as a part of the company’s wellness program.  The information was used to identify the health risks and medical conditions common among the participants and, except for tobacco use, the data was reported by the plan’s outside administrator to the company in the aggregate so that the company would not know individual employees’ results.  The company used the information to estimate its insurance costs, evaluate the need for stop-loss insurance, and to set premiums and co-pays.  Participation in the wellness plan was not a condition of employment.

Federal law prohibits employers from requiring its employees to submit to medical examinations unless such examinations are job-related and consistent with business necessity.  However, the law also provides a “safe harbor” exemption allowing employers to establish or administer the terms of a bona-fide health insurance benefit plan that are based on underwriting risks, classifying risks, or administering such risks.  In this case, the company argued that its health risk assessment and biometric test was a term of its health insurance plan and that their inclusion was for the purpose of underwriting, classifying and administrating health insurance risks.  The court agreed.

In EEOC v. Flambeau, Inc., 2015WL9593632 (W.D. Wisc. Dec. 31, 2015) , the court recognized that this issue has not been previously decided by any of the lower federal courts in the Seventh Circuit (Wisconsin, Illinois and Indiana), but a similar case has been decided by the Eleventh Circuit which covers Alabama, Georgia and Florida.  The court found support in the Eleventh Circuit Court of Appeals decision.  The court also recognized that relying on the “safe harbor” exemption may not be appropriate when there is a stand-alone wellness program unrelated to the administration of insurance risks.  However, the company’s wellness program in this case was tied to administration of insurance risks.  Further, the court found that the wellness program was not used as subterfuge to evade the purposes of the ADA since the information gathered from tests and assessments was not used to make disability-related distinctions regarding employee benefits and was not related to any alleged discriminatory acts.

A company’s use of a mandatory wellness program is an evolving area of the law as it applies to the ADA.  Whether a company’s wellness program fits within the ADA’s safe harbor may need legal review. As seen by the above case, a judicial result may depend upon how a wellness program is structured and how the information from a wellness program is received and utilized by an employer.  These cases will continue to be watched for further developments.