Wellness programs are great—in theory. Employees all meet in the conference room to eat fresh fruit, granola and yogurt while a representative tells them about a plan designed to make them healthier, happier and, coincidentally, less likely to need services covered by the company’s health insurance plan. What’s not to like?
The EEOC is apparently not a fan of such plans. At least not the way that the plan was implemented by Wisconsin-based Orion Energy Systems. Last week the EEOC, probably after a big breakfast of bacon, eggs and donuts, filed suit against Orion claiming that Orion’s wellness plan violated the ADA as an unlawful medical examination and that Orion retaliated against employees who refused to participate in the plan (EEOC v. Orion, Eastern District Wisconsin, No 1:14-cv-1019). And, as much as I hate to admit it, I tend to agree with the EEOC on this one.
Under the ADA, an employer may not require an employee to submit to a medical examination unless doing so is “job-related and consistent with business necessity” (JRACWBN) or, if it is in connection with a voluntary wellness program.
There is no doubt that Orion’s wellness plan constituted a medical examination. Employees had blood work done, provided medical histories, and used range-of-motion devices as part of the initial wellness assessment. Orion claimed that it asked for much of the broad-ranging information garnered in the assessment for “preventative reasons.” It is unlikely that Orion’s initial assessment will qualify as JRACWBN.
Orion claimed that this did not matter because the plan was voluntary. However, although Orion did not force its employees to participate in the plan or terminate their employment if they refused, it was not truly “voluntary” as most of us would define the word. Orion paid 100% of the health insurance premiums for employees who participated in the wellness plan, a cost of $400 to $750 a month. Orion paid 0% of the premiums of employees who refused to participate. In addition, Orion assessed a $50 per month penalty against employees who would not participate. While Orion’s payment of the premiums can be seen as an incentive, the EEOC construed it otherwise. The EEOC has claimed that this “draconian financial penalty” essentially rendered participation in the wellness plan mandatory.
Keep in mind these are just the allegations contained in the EEOC’s Complaint. Orion has not yet answered, and we will not have a decision from the Court any time soon, if ever. I am of the opinion that “incentives” or bonuses for participation in wellness plans will probably pass muster. After all, the ACA wellness provisions specifically mention employers granting rewards to those who achieve results in health-contingent wellness plans. I am very leery of penalties though. It is more likely than not that any type of penalty will cause the plan to be involuntary. In any case, it is a good idea to track this case and others dealing with wellness plans, and, in particular, those impacted by the ADA and ACA.