The Equal Employment Opportunity Commission (EEOC) has filed its second suit alleging that a company’s wellness program violated the Americans With Disabilities Act (ADA). On September 30, 2014, the EEOC filed suit in the Western District of Wisconsin, claiming Flambeau Inc., a Wisconsin- based plastics manufacturer, illegally discontinued an employee’s medical insurance coverage after the employee failed to meet the requirements of the company’s wellness plan. The Flambeau complaint follows just over a month after the EEOC filed its first challenge to a company wellness program alleging that another Wisconsin employer, Orion Energy Systems, unlawfully fired an employee who elected not to participate in an allegedly voluntary wellness plan. As employer wellness programs continue to increase in popularity, the EEOC’s enforcement activity is an important reminder that employers need to use caution in developing and enforcing such plans.
The ADA provides that an employer shall not require medical examinations or inquiries unless such examinations or inquiries are job-related and consistent with business necessity. 42 U.S.C. § 12112(d) (4)(A). However, the ADA also provides an exemption that such examinations and inquiries are acceptable if they are a part of a voluntary health program at the worksite. 42 U.S.C § 12112(d)(4)(B).
In May 2013, the EEOC issued a press release outlining its concerns with wellness programs, including: 1) conflicts with the ADA and the voluntariness of the programs; 2) possible violations with the Genetic Information Nondiscrimination Act (GINA), which prohibits discrimination on the basis of genetic information including family medical history; and 3) potential violations of Title VII of the Civil Rights Act or the Age Discrimination in Employment Act, because health conditions may be dispersed disproportionately based on age, gender, and race. At that time, the EEOC also suggested that it would issue guidance on the interplay between wellness programs, which have been encouraged by the Department of Labor (DOL) and have been found to lead to decreased health care costs and improved health among employees, and anti-discrimination laws. The EEOC addressed wellness programs’ compliance with GINA in regulations released in 2013; although, it has not yet issued a guidance on ensuring that wellness plans comply with the ADA.
According to the EEOC’s Flambeau complaint, employee Dale Arnold was expected to complete a “voluntary” health assessment and testing pursuant to the Flambeau wellness plan. Arnold, however, was unable to do so because he was on leave getting treatment for various illnesses. When Arnold failed to complete the assessment, the EEOC alleged that Flambeau unlawfully discontinued Arnold’s medical coverage. The EEOC further claimed that compliance with the wellness program, which required blood tests, measurements, and disclosure of employee’s medical history; and was not job-related or in line with business necessity, as required by the ADA. Further, the EEOC alleged that the plan’s health risk assessment included disability-related questions and exams within the meaning of the ADA. According to the suit, the program was not “voluntary” because, among other things, Arnold suffered a financial penalty for refusing to participate and because the receipt of subsidized health insurance was conditioned on completion of the program.
The EEOC’s first suit, filed in the Eastern District of Wisconsin, concerned Orion’s wellness program’s requirement that employees disclose their medical history, complete a physical exam, and take blood tests. According to the EEOC’s complaint, employee Wendy Schobert, refused to participate out of concern that the company could not guarantee the confidentiality of the information she shared. As a result, Schobert was required to pay more than $400 a month to cover her insurance premiums – an amount that Orion allegedly would have otherwise covered – and $50 a month as a penalty for refusing the physical exam. The EEOC claimed that Schobert was fired one month after opting out of the program in retaliation for objecting to the wellness program.
According to the EEOC, wellness programs are becoming more popular, and 94 percent of employers with more than 200 workers offer one, as well as a majority of all employers. In a press release issued after the initiation of the Orion suit, the EEOC reiterated that voluntary wellness programs are completely legal and encouraged, “but they have to be actually voluntary…. Having to choose between responding to medical exams and inquiries – which are not job-related – in a wellness program, on the one hand, or being fired, on the other hand, is no choice at all.”
In response to the heightened focus on company wellness programs, employers should consult with counsel in an effort to ensure that their wellness program does not run afoul of any federal statutes. In addition to the employment statutes mentioned above, wellness programs must also comply with the Affordable Care Act (ACA), the Employee Retirement
Income Security Act (ERISA), and the Health Insurance Portability and Accountability Act (HIPAA). The DOL has provided insight on compliance with the ACA, explaining that among other things, wellness programs must offer reasonable alternatives for individuals with medical conditions to participate and qualify for the same reward. As mentioned above, GINA may prohibit the employer from requesting even voluntary disclosures in certain instances. Thus, it is vital that employers consider all applicable laws when developing and maintaining a wellness program.