According to the EEOC, a majority of employers now offer some form of wellness program. Employer wellness programs are designed to incentivize employees to adopt a healthier lifestyle and benefit employers in the form of lower costs for insurance premiums and decreased absenteeism. Participation requirements vary widely from program to program, but employees who participate are often subject to medical examinations and disability-related inquiries that may otherwise be impermissible under the ADA. Under the ADA those examinations and inquiries are allowed if participation in the program is voluntary.
Near the end 2014, the EEOC filed complaints related to three employer wellness programs run by Honeywell International, Inc., Orion Energy Systems, Inc., and Flambeau, Inc. alleging that the programs were not voluntary. Each program required employees to submit to certain medical examinations including biometric testing, blood draw, and answering health-related questions. According to the EEOC complaints, employees who refused or failed to participate incurred a range of severe consequences, including canceled medical insurance, a directive to pay their full insurance premiums, discipline, or termination. The agency determined that such penalties rendered the programs involuntary, and therefore impermissible under the ADA.
The EEOC’s position on wellness programs poses substantial uncertainty for many employers. That uncertainty also stems from the fact that other laws, such as the Health Insurance Portability and Accountability Act (“HIPPA”) and the Affordable Care Act (“ACA”), expressly permit incentive based wellness programs. In March, in a move to stem the uncertainty, the agency sent proposed wellness plan rules to the Office of Management and Budget for review before publication for notice and comment in the near future.
In light of the EEOC’s recent actions, employers who maintain an incentive-based wellness program should heed the following advice. First, employers need to ensure their wellness program is voluntary, meaning an employer neither requires participation nor penalizes employees who do not participate. Because the EEOC is yet to rule on whether withholding a reward from non-participants constitutes a penalty, employers should expect the EEOC to take a case-by-case approach on scrutinizing workplace wellness programs. Second, even if an employer’s wellness program is ACA-compliant, an employer may still face an EEOC investigation and lawsuit. In light of the current legal landscape, employers should consult with counsel to tailor their wellness program in a way that will benefit their employees and avoid costly ligation.
Janine Fletcher is an associate in Kelley Drye & Warren LLP’s New York office and is a frequent contributor to the Labor Days blog.