Employers implementing new voluntary workplace wellness programs that are otherwise compliant with regulations under the Affordable Care Act (ACA) are nevertheless finding themselves in the crosshairs of the Equal Employment Opportunity Commission (EEOC) if those programs are deemed to be compulsory.
On October 27, 2014, the EEOC filed a petition for a temporary restraining order in the United States District Court for the District of Minnesota to enjoin Honeywell International Inc.’s implementation of a wellness program. Honeywell’s program requires employees and their spouses (if family coverage is elected) to participate in biometric screening or pay a monetary penalty if they chose to opt out of the program.
The biometric screening includes a blood draw to determine cholesterol and glucose levels as well as a body mass index analysis. However, under the program, if the employee and/or their spouse declines to participate with the biometric screening, the employee risks loss of a contribution to the employee’s Health Savings Account by Honeywell (up to $1,500 depending on salary and coverage), a $500 surcharge applied to the employee’s 2015 medical plan costs, and a $1,000 “tobacco surcharge” for each covered member under the employee’s election. The EEOC argued the program, by way of its monetary penalty, would compel employees to undergo a medical examination that is not job-related or consistent with a business necessity in violation of the Americans with Disabilities Act (ADA) and obtain genetic information in violation of the Genetic Information Nondiscrimination Act (GINA).
At oral argument, the EEOC was unable to clarify at what point a monetary penalty caused a voluntary wellness plan to become compulsory and left the district court to speculate whether, in fact, employees would be compelled under the program. Thus, without a showing of imminent and irreparable harm from the implementation, District Court Judge Ann D. Montgomery denied the petition for a preliminary injunction. However, employers are left for the time being with little guidance from both the EEOC and the court on when monetary penalties under a wellness program will be found compulsory.
Employers implementing new wellness programs must look beyond the regulations of the ACA and carefully examine the compulsory effect of monetary penalties, if any, under anti-discrimination laws like the ADA and GINA. Moreover, the risk for class and collective actions based upon offending wellness programs is significant enough that both practitioners and liability carriers must begin tracking the emerging standard for compulsion so as to properly anticipate new liabilities and exposures going forward.