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How "Well" Is Your Company's Wellness Program?

Employer wellness programs are generally designed to incentivize employees to adopt a healthier lifestyle in exchange for financial rewards. Participation requirements vary widely from program to program, but employees who participate are often subject to medical examinations and disability-related inquiries that may otherwise be impermissible under the Americans with Disabilities Act (ADA). Those examinations and inquiries are allowed under the ADA, however, if participation in the program is "voluntary."

In the waning months of 2014, the EEOC took aim at three employer wellness programs run by Honeywell International, Inc., Orion Energy Systems, Inc. and Flambeau, Inc., alleging that the programs lacked the crucial "voluntary" element. Each program required employees to submit to certain medical examinations—such as biometric testing or a blood draw—and to answer health-related questions. According to the EEOC complaints, employees who refused or failed to participate incurred a range of "severe consequences," such as canceled medical insurance, a directive to pay their full insurance premiums, discipline or termination. The agency determined that such penalties rendered the programs involuntary and, therefore, impermissible under the ADA. In the Honeywell action, the EEOC further claimed that the company violated the Genetic Information Nondiscrimination Act by penalizing an employee when his wife refused to participate in the medical examinations, which could have revealed certain family medical history information.

The EEOC's position on wellness programs is troubling for a number of reasons. First, while the agency has expressed interest in issuing regulations that will clarify the criteria for establishing a "voluntary" wellness program, no such regulations have been issued. Second, certain Health Insurance Portability and Accountability Act (HIPAA) and Affordable Care Act (ACA) statutory provisions, rules and regulations allow for incentive-based wellness programs and permit, in specific circumstances, penalties for nonparticipation. The EEOC's stance in the three cited suits seemingly runs contrary to this other Federal legal authority.

These cases are all in their early stages, and there is no way to know whether the courts will agree with the EEOC's litigation position. In any event, employers are cautioned to carefully review and consider the terms of their wellness programs prior to implementation and to evaluate whether modifications are appropriate in light of the recent EEOC actions noted above.

© 2020 Vedder PriceNational Law Review, Volume V, Number 77

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About this Author

Elizabeth N. Hall, Vedder Price Law Firm, Labor Employment Attorney
Shareholder

Elizabeth N. Hall is a shareholder  in the firm’s Labor and Employment Practice Area.  Her experience includes defending employers before state and federal courts and administrative agencies in all types of individual employee and class action labor and employment litigation including equal employment opportunity, wrongful and retaliatory discharge and wage and hour issues.  Ms. Hall has successfully argued procedural and employment discrimination issues in the United States Court of Appeals for the Seventh Circuit, and has particular expertise managing electronic discovery in complex...

312-609-7795
Philip L. Mowery, Vedder price law firm, Labor Employment Attorney
Shareholder

Philip L. Mowery joined the Chicago office of Vedder Price in the Employee Benefits Group in 1988 and became a shareholder in 1995. He counsels a variety of corporations in the manufacturing and service industries on all aspects of employee benefits law, including the design, tax qualification, legal compliance, interpretation and communication of employee benefit plans. He also counsels employers and executives in the negotiation and implementation of executive compensation agreements and programs. Finally, he represents management and plan fiduciaries in employee benefits litigation. He...

312-609-7642