The U.S. District Court for the District of Minnesota recently denied a motion for a preliminary injunction against aspects of Honeywell’s wellness program.
In EEOC v. Honeywell International, Inc., the EEOC challenged certain surcharges that Honeywell imposes on employees who participate in the Company’s High Deductible Health Plan and do not participate in a wellness program with required biometric screenings. No. 14-4517 ADM/TNL (D. Minn., Nov. 6, 2014). In order to be eligible for a Health Savings Account, employees who participate in the wellness program are required to be screened for blood pressure, height, weight, waist circumference, and cholesterol, glucose and nicotine levels. Employees who do not participate are subject to a $500 annual surcharge. Employees and their spouses may also be subject to $1,000 annual surcharge if they are tobacco users. Employees and spouses who refuse to be screened are presumed to be tobacco users, unless they establish that they are tobacco free in another way. When employees agree to the testing, Honeywell receives the data in aggregate form, but does not receive individual results.
The EEOC alleges that Honeywell’s wellness program violates the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA) and sought a preliminary injunction against the imposition of surcharges while the case is pending. The court denied the motion for a preliminary injunction.
In order to obtain a preliminary injunction, the EEOC needed to show four things: (1) the threat of irreparable harm; (2) that the balance of harms favored the injunction; (3) the likelihood of success on the merits; and (4) that the public interest favored the injunction. The court found that the EEOC failed to prove irreparable harm, explaining that the three employees represented by the EEOC had already agreed to the biometric testing and did not demonstrate any potential violation of their privacy. The court also found that the balance of harms did not favor the injunction because the injunction would likely result in increased costs for Honeywell’s healthcare program and would create problems for the administration of the health plan.
With respect to likelihood of success on the merits, the court did not analyze the issue in-depth, but identified some potential problems for the EEOC’s case. First, the Court noted that Honeywell’s wellness program may qualify for the safe harbor provision of the ADA, which allows companies to establish or administer “the terms of a bona fide benefit plan that are based on underwriting risks, classifying risks, or administering such risks that are based on or not inconsistent with state law.” 42 U.S.C. § 12201(c)(2). Second, the court noted that Congress specifically approved of surcharges in a provision of the Affordable Care Act, which provides that “the absence of a surcharge” may be used as a reward in a wellness program. Third, the court noted that the biometric screening may not constitute a “genetic test” for purposes of GINA, which is defined as “analysis of human DNA, RNA, chromosomes, proteins, or metabolites, that detects genotypes, mutations, or chromosomal changes.” 29 U.S.C. § 1191b(d)(7).
The court concluded by stating that “great uncertainty persists in regard to how the ACA, ADA and other federal statutes such as GINA are intended to interact.” As a result, the Court refused to issue a preliminary injunction against Honeywell’s wellness program.
Takeaway: The Honeywell case is an important test case regarding the viability of wellness programs with financial surcharges. The Court’s initial denial of the EEOC’s motion for a preliminary injunction is a positive sign that the practice may be permissible, but it is not a final decision on the merits.