By: Mark Casciari, Ben Conley and Kylie Byron
The EEOC has commenced two lawsuits since August against employers who have established wellness programs that appear to comply with HIPAA’s wellness rules (as expanded by the Affordable Care Act). The EEOC contends that the programs violate the Americans with Disabilities Act (ADA). The EEOC alleges that the ADA prohibits employers from penalizing participants who fail to complete a health risk assessment/biometric screening if participation was not “voluntary.”
Nothing in the ADA restricts wellness programs to those that are “voluntary.” To the contrary, the ADA contains a benefit plan safe harbor that limits ADA applicability in the benefit plan context to claims that a plan is used as a subterfuge for disability-based discrimination in non-benefit aspects of employment. The EEOC conveniently ignores this safe harbor.
The EEOC has said that it is considering formal guidance on the applicability of the ADA to HIPAA-compliant wellness programs, but now that guidance appears unlikely given a split in views of the EEOC Commissioners on the subject.
The facts of the two cases just filed by the EEOC are worth noting. In the first case, involving Orion Energy Systems, the employer allegedly canceled an employee’s medical insurance and subsequently terminated her employment because she would not participate in medical exams that are said to have asked disability-related wellness program questions.
In the second case, the EEOC sued Flambeau, Inc. for allegedly cancelling an employee’s medical plan after he failed to complete a health risk assessment and biometric screening that was part of the company’s wellness program. The employee alleged he could not complete the health risk assessment/biometric screening because he was on medical leave.
Considering the wellness program structures alone (and putting aside for now the alleged termination of employment in Orion and the fact that the employee was arguably not given an effective opportunity to complete the requirements in Flambeau), the EEOC’s position in both cases runs counter the decision of the Court of Appeals for the Eleventh Circuit in Seff v. Broward County, 691 F.3d 1221 (11th Cir. 2012). In Seff, the Court upheld what could be characterized as an “involuntary” wellness program by citing to the ADA benefit plan safe harbor. There, the employer imposed a $20 biweekly premium surcharge on employees who refused to complete a health risk assessment/biometric screening. The Court found that deduction was a term in a benefit plan, and thus protected by the ADA safe harbor.
A challenge based on a similar program is pending in Oregon against the Oregon Public Employees’ Benefit Board (PEBB). Notably, the EEOC did not participate in the Seff case and has not yet weighed in on the suit against the Oregon PEBB
Employers with wellness programs, especially HIPAA-compliant programs that can be seen as aggressive, need to be aware that, even though the EEOC is lurking, there are sound arguments to keep the EEOC at bay.