A Wisconsin federal district court dismissed (with prejudice) a complaint by the Equal Employment Opportunity Commission (EEOC) that a company’s wellness program violated the Americans with Disabilities Act (ADA). The EEOC had alleged that, by requiring its employees to complete a health risk assessment (HRA) and submit to biometric testing as a precondition to qualifying for group health insurance coverage, Flambeau, Inc. had violated the ADA.
The ADA generally prohibits employers from requiring their employees to submit to medical examinations. However, the ADA rules contain a “safe harbor” exemption for examinations and similar activities related to the administration of a bona fide insurance benefit plan. The ADA also permits employers to offer “voluntary” wellness programs.
Flambeau required employees to complete an HRA and biometric testing on a particular day during the annual open enrollment period in order to be eligible for active employee coverage in the following year. An employee did not complete the HRA or biometric testing (allegedly because he was on medical leave on the appointed day). Flambeau denied the employee an opportunity to complete the screening at a later date but gave him the opportunity to participate in the health insurance through COBRA (i.e., without any premium subsidy) – which the employee rejected. The employee filed a grievance with his union and complaints with the EEOC and the Department of Labor. Flambeau ultimately relented and permitted the employee to complete the HRA and testing at a later date and thereafter reinstated the employee’s health coverage retroactively to the beginning of the year. Nevertheless, the EEOC filed a suit alleging that the HRA and testing violated the ADA’s ban on employer-mandated medical exams.
The EEOC argued that Flambeau’s HRA and testing requirements were not a “voluntary wellness program” but were a “required” medical examination. Flambeau argued that participation in its group health program (and the associated testing) was voluntary and that the HRA and testing were permitted to be part of the group health plan under the ADA safe harbor for bona fide benefit plans. The court did not reach the question of whether Flambeau’s HRA and testing were “voluntary” or “required” because it held that (i) the ADA safe harbor does not require the HRA or testing to be voluntary, and (ii) the HRA and testing fit within the ADA safe harbor.
Specifically, the court found that the data from the HRA and testing was used for plan administration. Flambeau’s consultants used the data to classify risks among the population, estimate projected costs, recommend plan fees and cost-sharing for medication and preventive care treatment, develop participant premiums (e.g., a tobacco use surcharge), and evaluate the need for stop-loss insurance. The court also held that there was no evidence that Flambeau used the data to discriminate against employees based on any disability, and there were no allegations that Flambeau made any disability-related distinctions in its employee benefit plans.
Other interesting aspects of the decision:
- The court held that the HRA and testing were “a term” of its group health plan (as required by the ADA safe harbor) even though it was not stated in the official plan documents, SPD or collective bargaining agreement. The court noted that the EEOC did not allege that Flambeau failed to provide the employees with adequate notice of the HRA and testing requirements.
- The court indicated that the EEOC’s proposed regulations regarding wellness plans addressed solely stand-alone wellness programs, not wellness programs (like Flambeau’s HRA and biometric testing) which are integrated into a group health plan. The EEOC may address this scenario in its final regulations.
- The EEOC has not announced whether or not it will appeal the decision. The EEOC has similar complaints pending against Honeywell and Orion Energy Systems. Those cases are in the District Court of Minnesota and the Eastern District of Wisconsin, respectively. The Orion case is within the jurisdiction of the same court of appeals as the Flambeau decision.