It’s a new year, and some of your employees may have resolved to lose weight, eat more healthfully, or even give up smoking in 2016. But employees aren’t the only ones interested in their own health and wellness.  Corporate wellness programs can be an effective way for employers to encourage healthy behavior from their workforce while saving costs on health care premiums.

While wellness programs are gaining in popularity, employers still lack clear guidance on how best to implement such programs. The EEOC has created even more confusion by filing a spate of lawsuits challenging wellness programs.  Fortunately, two recent cases in Wisconsin provide insight (even to employers outside Wisconsin) into the do’s and don’t’s of corporate wellness programs.

In EEOC v. Flambeau, Inc., the company required employees to undergo mandatory medical exams as part of its corporate wellness program.  Under the Americans with Disabilities Act, employers may not require employees to submit to medical exams unless they are job-related.  The EEOC filed suit, alleging that these mandatory medical examinations − and the company’s wellness program − violated the ADA.

In ruling in favor of the company, the court held that the company’s wellness program fell under the ADA’s “safe harbor” provision because the mandatory health assessment and biometric testing were a condition for employees to voluntarily receive insurance. Moreover, employees were not treated adversely if they did not participate in the program.

Under the wellness program at issue in EEOC v. Orion Energy Systems, Inc., employees were required to complete a health risk assessment.  Only one employee declined to participate.  As a result, she was forced to pay $50 per month for failing to partake in the program’s fitness component and was required to pay the full amount of her health care premiums, while participating employees received a discount.  The employee alleged that she spoke out about the price of her premiums and was fired a few weeks later.  The EEOC brought suit, alleging that the employee was fired because she did not participate in the program (but notably, did not challenge that the program itself was unlawful).

The company argued it complied with the ADA because the health risk assessment was voluntary. The company also argued that because it received only aggregated health data about its employees from the health assessment, it was unaware that the terminated employee was the same individual that failed to participate.  The court should rule on the parties’ arguments in the near future.

So what can you, as a Texas employer, take away from these cases?

  • The EEOC continues to aggressively litigate what it views as “discriminatory” corporate wellness programs. You can expect more cases like these until Congress or the courts better define what constitutes a “lawful” wellness program.
  • Flambeau and Orion both involve programs that appeared to penalize employees for failing to participate in the wellness program. Instead of focusing on penalties (e.g., a $50 monthly fine for employees who smoke), consider providing incentives for employees who participate (e.g., a $50 credit toward health insurance premiums for those who have quit smoking or pledge to quit).
  • Finally, while it may be lawful to charge higher premiums for employees who opt out of your wellness program, you should not deny coverage outright. In addition, do not take adverse action or retaliate against an employee based on their participation (or lack thereof) in your corporate wellness program.