In one of the few cases that has considered the legality of an employer wellness program, the Eleventh Circuit Court of Appeals considered a challenge by an employee of Broward County, Florida to the county’s imposition of a $20.00 bi-weekly charge on employees enrolled in the group health insurance plan who refused to participate in the employee wellness program. The wellness program required the employee to complete an on-line health risk assessment questionnaire and a biometric screening including a finger stick blood test for glucose and cholesterol. The information was used to identify employees with certain chronic diseases who then were given the opportunity to participate in a disease management program. Employees who participated in that program were eligible for co-pay waivers for certain medications. The employee challenged the imposition of the charge and attempted to have the case certified as a class action on behalf of all county employees. The employee claimed that requiring the blood test and questionnaire violated the prohibition in the American With Disabilities Act (ADA) on nonvoluntary medical examinations and disability related inquiries.
The ADA contains an exemption for insurance plans from the prohibition on medical examinations and disability related inquiries. Under that exemption, the ADA is not to be construed as prohibiting an employer from “establishing, sponsoring, observing or administering the terms of a bona fide benefit plan that are based upon underwriting risk, classifying risk, or administering such risks that are based on or are not inconsistent with state law.” The federal district court had concluded that the employee wellness program was a term of a bona fide benefit plan and therefore permissible under the ADA exemption. The employee challenged that conclusion on the basis that the county’s plan documents did not contain the wellness program provisions.
The Eleventh Circuit Court of Appeals upheld the district court’s decision. The court of appeals determined that the terms of a bona fide plan are not limited to the terms in the physical document labeled group health plan. In this case, the terms of the wellness program were included in at least two employee handouts so were communicated to the participants as terms of the plan. Therefore, the court denied any recovery to the employee.
As it happens, the county had already stopped imposing the additional charge. Of course, in light of the case, the county could decide to reinstate it.
Under the court’s reasoning, there would be few limits on structuring a wellness program under the ADA so long as the program’s terms are included under the bona fide medical plan. (Of course, an employer would also have to make sure that its wellness program met other legal requirements such as those imposed by the Department of Labor under the HIPAA portability rules.) The ADA also prohibits medical examinations or disability-related inquiries unless they are voluntary or required by business necessity. Many practitioners have been concerned that if the penalties for failure to participate in a wellness program are too severe or the rewards too high, then the program will not be viewed as voluntary. If the program includes a health risk assessment or biometric screening, an employee could claim that the program components are medical tests or disability related inquiries. In many cases, it would be difficult to justify a health risk assessment or biometric screening under a business necessity standard. The EEOC has stated informally that requiring a health risk assessment as a condition to obtaining coverage violates the ADA as a disability related inquiry that is not voluntary. Under the court’s reasoning, so long as the requirement is part of a bona fide benefit plan, it would be permissible.
Although employers can take comfort from this ruling, they should understand that the EEOC may still challenge wellness programs on a voluntariness standard. While employers in the Eleventh Circuit may have some protection, employers in other circuits should still evaluate their programs to make sure that they meet all legal standards.