Earlier this month, the EEOC and Orion Energy Systems settled a case pending in a Wisconsin federal court in which the EEOC alleged that the company’s wellness plan violated the Americans with Disabilities Act (ADA). This case goes back to the spring of 2009 when an employee was forced to pay 100% of her group health insurance premium because she refused to submit to a “health risk assessment” (HRA) during open enrollment. Those employees who submitted to the HRA did not have to make any contribution for health insurance coverage. The HRA consisted of a health history questionnaire, biometric screen involving a blood pressure check, height, weight and body circumference measurement and blood draw and analysis. An employee in the accounts payable department openly complained about the HRA, elected not to participate and was charged the full monthly premium (no company contribution). She was counseled to keep her opinions about the wellness plan to herself. Within a few weeks after that, the employee criticized the company’s CEO’s request for information about the employee’s coffee and water breaks. Orion terminated the employee about 10 days later.
The EEOC filed suit against Orion, challenging the HRA as an “involuntary” disability inquiry and claiming Orion retaliated against the employee, both in violation of the ADA. The court’s September 2016 decision in the case partially vindicated both sides by (1) holding against Orion in concluding that the wellness plan was not exempt from ADA scrutiny as a “bona fide benefit plan,” thus upholding retroactive application of a portion of the EEOC’s May 2016 regulations governing wellness plans; and (2) ruling against the EEOC in deciding the wellness program was voluntary even though an employee who didn’t participate in the HRA was forced to pay 100% of the premium for health coverage compared to an employee who submitted to the HRA who didn’t have to pay anything for the coverage. The EEOC’s new wellness regulations permit only a 30% incentive but the EEOC didn’t try to argue for retroactive application of the 30% limit. The court left on the table for further proceedings the EEOC’s retaliation claim, which the parties settled under a “Consent Decree.”
Under the settlement, Orion agreed to (1) pay the employee $100,000 (actually $75,000 because $25,000 went to the employee’s attorney); (2) only maintain a wellness program in the future that complies with the EEOC’s regulations on “voluntary” programs; (3) not retaliate against any other employee who complains about a wellness program; (4) direct employees to send concerns about the wellness program to the HR department; and (5) train employees on the requirements of the ADA over a three-year period and report to the EEOC. Orion also agreed to implement another wellness plan during the next three years only under EEOC supervision.
The settlement cuts off the opportunity for any future court orders issuing from this case. A portion of this court’s previous order is at odds with other court decisions in this area over the past couple of years. As a result, this leaves plenty of questions for employers about how to properly implement a wellness plan.