WELLNESS PROGRAM ASSESSMENTS HOLD UP IN COURT

By January 28, 2016Blog

In a recent decision a Federal District Court Judge rejected a U.S. Equal Employment Opportunity Commission’s (EEOC) challenge and upheld a company’s (Flambeau, Inc.) wellness program. The judge ruled that the program’s assessment and testing fell within the Americans with Disabilities Act’s (ADA) safe harbor, which provides an exemption for activities related to the administration of a benefit plan.

The history of the case lies in the fact that Flambeau, Inc. maintained a self-funded group health plan. After a few years, the Flambeau wellness program added a HRA and biometric screening for employees that wanted to enroll in its group health plan. Then in 2011 Flambeau gave a $600 credit to employees if they participated and completed both the HRA and the biometric test. In 2012, the company eliminated the credit and began to offer health insurance only to those employees who completed the wellness program. These changes created an issue for an employee after he missed the program’s renewal deadline.

The employee participated in the wellness program in 2011. He enrolled in the company’s group health plan and received the $600 credit. The next year the employee failed to complete the program’s health assessment and tests by the proper deadline. The company discontinued his medical coverage.

In response the employee filed a complaint with the Department of Labor (DOL) and EEOC. After discussions with the DOL, the company agreed to reinstate the employee’s coverage after completion of the required testing and assessment. But the EEOC decided to sue the company alleging that the they violated the provision of the ADA that prohibits employers from requiring their employees submit to medical examinations.

In upholding organization’s wellness program, the Flambeau case telegraphs how other courts may view the ADA bona fide benefit plan safe harbor as applied to wellness programs. Specifically, the court held the following:

  1. A wellness program requirement has to be a term of an employer’s benefit plan.
  2. Employees must receive adequate notice of any wellness program requirement.
  3. A wellness program requirement must be based on underwriting risks, classifying risks, or administering such risks.
  4. A wellness program cannot be mandatory.
  5. A wellness program requirement cannot be a pretense to discrimination.
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