Legal Perspective On Wellness Programs

To provide companies with some legal perspective, the authors of a new studyanalyzed several recent ADA-related court challenges to corporate wellness programs filed by the Equal Employment Opportunity Commission (EEOC). For example, Orion Energy Systems offered to pay its employees’ health insurance premiums if they signed up for its wellness program — which required participants to get blood tests and divulge their medical history — but charged them the full premium if they declined. One employee who refused to participate was fired two months later. This caused an EEOC attorney to contend that the voluntary wellness program wasn’t exactly voluntary and that it violated the law because “having to choose between responding to medical exams and inquiries — which are not job-related — in a wellness program, on the one hand, or being fired, on the other hand, is no choice at all.” The case is still pending as of August 2016.

Flambeau Inc., a plastics manufacturer, was also challenged by the EEOC over its wellness program, which required employees to complete biometric testing and fill out health-risk surveys; if they did not, they would lose their medical insurance. However, a judge ruled in the company’s favor, holding that the wellness program’s provisions fell under the ADA’s “safe harbor” exception, which stipulates that the ADA cannot prohibit or restrict an employer from implementing an insurance plan that is based on underwriting or classifying risks.

After reviewing the legal landscape, the researchers came up with a set of guidelines to help firms stay out of the courtroom. The authors suggest that companies:

• Seek to improve employees’ health. The best way to avoid a legal challenge is to demonstrate that a wellness initiative has a realistic possibility of increasing workers’ fitness and helping them avoid disease. The use of periodic test screenings or health questionnaires can meet this standard, but firms should always emphasize a plan’s intended potential benefits to its employees.

• Ensure that voluntary programs are truly voluntary. According to the EEOC, when it comes to voluntary wellness programs, employees can’t be forced to participate; denied coverage if they don’t join in; or be fired, demoted, or arbitrarily transferred for refusing to take part. The EEOC also states that incentives for participation can’t exceed 30 percent of the cost of the employee’s healthcare.

• Handle mandatory programs carefully. Companies that still believe they should implement mandatory wellness initiatives should at least comply with the ADA’s safe harbor rule. This means companies should make their mandatory wellness initiatives a part of their sponsored health plans and insurance risk assessments.

• Be prudent about dependents. The EEOC hasn’t made clear how it will evaluate firms’ requests for the health histories of an employee’s spouse or child. For now, companies should probably hold off on extending wellness programs to dependents.

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