EEOC Lawsuit Probes Intersection Between ADA, Wellness Programs

A new case out of the U.S. District Court for the Western District of Wisconsin tested the boundaries of the Americans with Disabilities Act (ADA) with respect to employer wellness programs.

The Equal Employment Opportunity Commission (EEOC) sued Flambeau, Inc., over the company’s employer wellness program. Employer wellness programs are legally required to be voluntary (not mandatory), and programs must make accommodations to ensure that employees are not discriminated against on the basis of disability.

The lawsuit centered on the definition of “voluntary.” While Flambeau, Inc. employees could choose not to participate in the wellness program, the Flambeau, Inc. employer-sponsored group health plan was only offered to wellness program participants. Employees who did not choose to participate in the wellness program were not permitted to enroll. The wellness program included a health risk assessment and biometric screening. Flambeau, Inc. received de-identified results of wellness program testing in aggregate, then used the results to set premium rates and adjust co-pays for the employer’s self-funded group health plan.

The EEOC argued that because the ADA bans employers from instituting mandatory medical examinations, Flambeau had violated the ADA (see 42 U.S.C. §12112(d)(4)(A)). However, Flambeau argued that the wellness program requirement was permissible because wellness program results were used for underwriting and administrative purposes. In other words, the wellness program participation requirement was a “term” of the group health plan, falling within the ADA “safe harbor” exemption for activities related to administration of a bona fide health plan.

Is participation in a wellness program “voluntary” if the consequence of non-participation is ineligibility for the group health plan? The court’s answer: yes.

The court stated that because wellness program participation was not mandatory for continued employment, the wellness program met the definition of “voluntary” under EEOC guidelines—even though participation was mandatory for continued group health plan coverage. “Regardless of their disability status, all employees that wanted insurance had to complete the wellness program before enrolling in [Flambeau’s] plan,” District Judge Barbara Crabb wrote, meaning that the plan “clearly did not involve [a disability-based distinction] or relate to discrimination in any way.” Therefore, the court found that Flambeau, Inc. had not discriminated against employees on the basis of disability and had not violated the ADA.

Employer wellness programs can be a valuable tool in encouraging employees to make healthy choices and potentially reducing health insurance claims, but case law and regulatory interpretations are constantly evolving. Employers should regularly examine their wellness programs for compliance with the ADA, the Affordable Care Act (ACA) and with any other applicable laws.

About The Boon Group

The Boon Group® is a full service employee benefits company specializing in the design, implementation and administration of cost-effective fringe benefit plans for federal, state and local government contractors. Since 1982, The Boon Group has developed a partnership philosophy that expands beyond the products and services we offer. We stand with the employers and employees who, just like all who work at The Boon Group, are faced with the daunting task of navigating the U.S. healthcare system. Together, we can find a better way for all Americans to access healthcare. The Boon Group, Inc. is the parent holding company of The Boon Insurance Agency, Inc., Boon Administrative Services, Inc. (formerly named CEBA), Boon Insurance Management Services, L.P., Health & Welfare Benefit Systems, Inc. and Boon Investment Group, Inc. The Boon Group was formed to support and strengthen the position of these companies as a wholesaler of exclusive products and services. www.boongroup.com
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