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The EEOC Continues to Challenge Employer Wellness Programs Through Litigation

Written by Gauri Punjabi

The U.S. Equal Employment Opportunity Commission is taking a hard look at employers who implement employee wellness programs that condition eligibility for benefits on participation in such programs. In the past few months, the EEOC sued three employers claiming that their wellness programs violated the Americans with Disabilities Act.

In August 2014, and as we wrote about earlier, the EEOC sued Orion Energy Systems Inc. in a Wisconsin federal court for penalizing an employee who declined to participate in the company’s voluntary wellness program and terminating her employment one month later. Orion’s wellness program required employees to disclose their medical history and submit to blood tests, among other things, even though none of the medical examinations or inquiries were job-related or consistent with business necessity. Employees who did not participate in the program were held responsible for paying the full costs of their health insurance premiums. Accordingly, as a result of opting out of the wellness program, non-participating employees had to pay $400 each month to cover insurance premiums, plus a $50 penalty as compared to participating employees.

A month later, the EEOC sued Flambeau, Inc. in a different Wisconsin federal court, arguing that Flambeau’s employee wellness program violated the ADA when it cancelled an employee’s medical insurance and held him responsible for paying the full premium cost because he failed to complete the voluntary health assessment and testing. As with the Orion case, the EEOC argued that the medical examinations and inquiries required under Flambeau’s program, which included biometric testing, were not job-related or in line with business necessity and not truly voluntary because employees could not receive coverage under Flambeau’s health insurance without completing them.

This past week, the EEOC sued Honeywell International, Inc. in Minnesota federal court to prevent it from implementing a wellness program, which requires employees and their spouses to undergo biometric testing or lose company contributions to their health savings plans and face steep surcharges tacked onto their medical plan costs. The EEOC contended that these program conditions, which were neither job-related nor consistent with business necessity, violated the ADA. Additionally, the EEOC argued that Honeywell violated the Genetic Information Nondiscrimination Act by obtaining the family medical history, including genetic information, of its employees by mandating biometric testing of their spouses.

Despite these cases, well-intentioned employers seeking to incentivize their employees to live healthier should not be deterred from instituting wellness programs. So long as such programs are truly voluntary, particularly where the required medical examinations and inquiries have no relation to the employee’s job or any business necessity, and do not have any penalizing effect on an employee who declines to participate, the programs should pass EEOC muster.

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