Regulatory Review

Company’s Wellness Program Falls Under ADA Safe Harbor Provision

An employee wellness program that requires employees to undergo biometric screenings and complete a health questionnaire won court approval.
By: | January 13, 2016 • 2 min read

Case name: Equal Employment Opportunity Commission v. Flambeau, Inc., No. 14-cv-638-bbc (W.D. Wis. 12/30/15).

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Ruling: The U.S. District Court, Western District of Wisconsin granted summary judgment to an employer on the Equal Employment Opportunity Commission’s claim that the employer violated ADA Title I by conditioning participation in the company’s health insurance plan on participating in its wellness program requirements. The court held that the wellness program fell within the ADA’s safe harbor provision.

What it means: According to this court, an employee wellness program that requires employees to undergo biometric screenings and complete a health questionnaire may fall within the safe harbor provision of 42 USC 12201(c)(2) if the program is a “term” of the employer’s group health plan.

Summary: A manufacturing company offered its employees the ability to participate in its subsidized health insurance plan on a wholly voluntary basis. Employees enrolling in the plan were required to participate in the company’s wellness program, which involved taking a health risk assessment and a biometric test.

The information gathered was used to identify the health risks and medical conditions common among the plan’s enrollees. The company used the information to estimate the cost of providing insurance, set premiums, and evaluate the need for stop-loss insurance.

The EEOC sued, alleging that the plan’s testing requirements violated the ADA’s ban on employer-mandated medical examinations.

The court granted summary judgment to the company, holding that the company’s assessment and testing requirements fell within the ADA’s safe harbor provision.

The ADA’s safe harbor provides that the ADA “shall not be construed to prohibit or restrict” an employer from establishing or administering “the terms of a bona fide benefit plan that are based on underwriting risks, classifying risks, or administering such risks.”

The court concluded that these protections “enable employers to design insurance benefit plans that require otherwise prohibited medical examinations as a condition of enrollment.”

The issue before the court was whether the company’s wellness program was a benefit plan like the one described in the safe harbor provision. The court concluded that it was.

The EEOC argued that the wellness program requirement did not qualify as a “term” of the company’s benefit plan.

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The court disagreed, pointing to the fact that the EEOC’s entire claim was premised on the fact that the company’s employees were required to complete the wellness program before they could enroll in the health plan, making it “clear” that the wellness program requirement was a “term” of the company’s benefit plan.

Furthermore, the court found, the wellness program requirement was clearly intended to assist the company with underwriting, classifying, or administering risks associated with the insurance plan. The company used the data to classify plan participants’ health risks and calculate its projected insurance costs, as well as to set premiums and determine whether to purchase stop-loss insurance.

These types of decisions, the court concluded, “are a fundamental part of developing and administering an insurance plan and therefore fall squarely within the scope of the safe harbor.” 

Christina Nevins, Esq., is the disability legal editor at LRP Publications. She can be reached at [email protected]

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The R&I Editorial Team can be reached at [email protected]