Skip to main content

Don’t Let Your Company’s Wellness Program Make You Sick

By December 29, 2015No Comments

In the last several years, employee wellness programs have grown rapidly as companies attempt to manage the cost of healthcare.

Currently, a majority of employers with 200 or more employees have wellness programs and use biometric screening in their wellness programs.

Such screenings typically check cholesterol, diabetes and body mass index. In these programs, employees can learn of their health risks and are encouraged to improve their health.

Sounds good, right? Not so fast. In the fall of 2014, the Chicago District of the EEOC filed lawsuits against Honeywell International, Orion Energy Systems and Flambeau Plastics (maker of Dunkin yoyo’s), alleging that the companies’ wellness programs violated the Americans with Disabilities Act (“ADA”).

In each of these cases, the EEOC alleged that the programs were not “voluntary” because they penalized employees who did not participate in the programs.

Generally, the ADA prohibits an employer from making disability-related inquiries or requiring medical examinations unless they are job-related and necessitated by business considerations.

The EEOC asserts that non-voluntary wellness programs force employees to provide information in violation of the ADA.

Under the Honeywell program, an employee would lose eligibility for a $1,500 contribution to the employee’s share of premiums and must pay a $1,500 “surcharge” in premiums, if the employee did not complete the wellness program’s biometric testing.

Honeywell responded to the lawsuit by asserting that its wellness program is in full compliance with the Affordable Care Act (“ACA”).

The EEOC countered that compliance with the ACA does not provide a “safe harbor” from the requirements of other federal laws.

So what should an employer who wants to institute or continue an employee wellness program do to avoid being sued by the EEOC?

Based on recent EEOC guidance, consider the following :

  1. The wellness program must be reasonably designed to promote health. A program that collects health information without using it to inform and advise employees may not meet the definition of a “wellness” program.
  2. The wellness program must be voluntary. Employees may not be required to participate in the wellness program and may not be disciplined if they do not participate.
  3. The incentive costs must be limited. The incentives offered to employees to participate in the wellness programs may not exceed 30% of the total cost of employee-only coverage.
  4. Medical information obtained as part of a wellness program must be kept confidential. A program that requires participation in a “Biggest Loser”-type of competition may violate HIPAA privacy rules and the ADA.
  5. Employers must provide reasonable accommodations to disabled employees which allow them to participate in the incentive programs.

There is no question that employers and employees have a vested interest in reducing healthcare expenses, and wellness programs are a method of incentivizing employees to share that responsibility.

However, the EEOC (particularly the Chicago District) has been aggressive in attacking wellness programs that it perceives as penalizing employees.

Also, an employee may pursue an individual ADA claim as a result of a wellness program.

As such, businesses should carefully consider the EEOC administrative guidance and the pending lawsuits when developing a wellness program.

If your company has or contemplates a wellness program, your FOS attorney can help you get through the EEOC’s program thicket.