By Jamie Zveitel Kwiatek and Alexia M. Noble
Employer-sponsored wellness programs have served as an excellent resource to assist employers in cutting the cost of providing health care for employees, improving employee productivity and increasing company stock performance. Often, wellness programs include health assessments and biometric testing. Recently, through both lawsuits and the issuance of regulations, wellness programs have been under attack by the EEOC as violating the ADA. However, in a win for wellness programs (as well as employees and employers), the U.S. District Court for the Western District of Wisconsin, in EEOC v. Flambeau, Inc., Case No. 3:14-cv-00638-bbc (W.D. Wis. Dec. 31, 2015), struck down the EEOC’s efforts by ruling that wellness programs that are part of a bona fide health plan are protected from ADA application.
In Flambeau, the Court held that a voluntary wellness plan, which required employees to complete a preliminary health assessment and biometric testing to participate in an employer-sponsored group health plan, was protected under the ADA’s “safe harbor” provision, which exempts bona fide benefit plans. The Court held that because the information was: 1) collected in an aggregate form; 2) anonymous; and 3) for the purpose of administering a self-funded, self-insured health insurance plan, the ADA safe harbor applied. This decision follows the Eleventh Circuit’s decision in Seff v. Broward County, 691 F.3d 1221 (11th Cir. 2012), which held that an employer’s wellness program fit within the ADA’s safe harbor provision.
These cases are a big step forward for employers that provide group health plans to their employees. The cases demonstrate that the courts support an employer’s right to institute voluntary wellness programs for the purpose of collecting information about health risks existing among their workforce without violating the ADA. Further, these decisions allow an employer to link participation in these voluntary programs to their employees’ ability to participate in employer-sponsored group health plans. The ability to institute these programs may help employers to predict and underwrite the costs of health insurance programs, as well as provide more effective programming to assist employees in improving their health and meeting their goals. In turn, this will have a beneficial effect on employee productivity and company performance.
Under the decisions in Flambeau and Seff, a wellness program meets the ADA safe harbor provision if:
- The employee’s participation in the program is voluntary (though an employee’s participation in the program may be required for participation in the benefit plan);
- The wellness program is part of a “bona fide” benefit plan;
- Information is collected anonymously;
- The information collected is obtained in an aggregate form (other than information regarding an employee’s tobacco use); and
- The purpose of the program is to assist in the administration of an employer-sponsored group health plan, including calculating costs, selecting premiums and adjusting co-pays.
To avoid potential ADA violations, employers should carefully consider whether and how their wellness programs are tied to their major medical and other “bona fide benefit plans.” It is unlikely that the EEOC will stop challenging wellness programs, but court decisions are encouraging. We will be monitoring this matter for further developments.