Smart Benefits: Is Your Wellness Program EEOC-Proof?

Monday, September 22, 2014

Amy Gallagher, GoLocalWorcester Business/Health Expert

The Equal Employment Opportunity Commission recently charged a Wisconsin-based company for violating federal law because it required employees to submit to medical exams and inquiries as part of a wellness program. When an employee declined, the company shifted responsibility for payment of the entire health insurance premium to her -- and fired her a short time later.

The Problem

According to the lawsuit filed by the EEOC, Orion Energy Systems instituted a wellness program that required medical examinations and made disability-related inquiries. Specifically, employees had to use a range-of-motion machine, provide their medical histories and have blood work done – all permissible if the information requested is job-related and consistent with business necessity or if it’s asked for in connection with a voluntary wellness program. But the EEOC claims Orion's wellness program violated the Americans with Disabilities Act (ADA) because it wasn't voluntary.

What’s Voluntary?

A wellness program is voluntary if employees are not required to participate and they are not penalized if they decide not to participate. While Orion’s wellness program was technically voluntary, meaning employees didn’t have to participate, those who didn’t take part had to pay 100 percent of their health insurance premiums out of pocket. If they participated in the program, the company paid 100 percent of the premiums.

According to John Hendrickson, regional attorney for the EEOC Chicago district, “They can't compel participation by imposing enormous penalties such as shifting 100 percent of the premium cost for health benefits onto the back of the employee or by just firing the employee who chooses not to participate. Having to choose between responding to medical exams and inquiries -- which are not job-related -- in a wellness program, on the one hand, or being fired, on the other hand, is no choice at all."

Beware

You can require medical exams or ask disability-related questions as part of a voluntary wellness program, but to avoid violating the ADA, just make sure your program’s actually voluntary.

Amy Gallagher has over 21 years of healthcare industry experience guiding employers and employees. As Vice President at Cornerstone Group, she advises large employers on all aspects of healthcare reform, benefit solutions, cost-containment strategies and results-driven wellness programs. Amy speaks regularly on a variety of healthcare-related topics, and is often quoted by national publications on the subject matter. Locally, Amy is a member of SHRM-RI, the Rhode Island Business Group on Health, and the Rhode Island Business Healthcare Advisory Council.