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Court Rejects Challenge to Employer's Wellness Plan
09/08/2012

In a closely watched case, a federal appeals court in Atlanta has rejected a challenge to a wellness plan maintained by Broward County, Florida for its employees. The case was brought by a former employee, who claimed the wellness plan violated the ADA by improperly requiring employees to submit to medical examinations.

As background, the ADA generally prohibits employers from requiring employees to undergo medical examinations or otherwise inquire of employees whether they are disabled. But purely voluntary medical examinations are permitted (as are bona fide fitness-for-duty examinations), and the ADA expressly allows employers to establish, sponsor, observe, or administer the terms of a bona fide benefit plan when those terms are based on underwriting risks, classifying risks, or administering risks. This latter rule is sometimes referred to as an underwriting "safe harbor" under the ADA.

The wellness plan in this case was fairly typical. Employees participating in the plan were subject to a health-risk assessment and a biometric screening (a finger prick for cholesterol and glucose testing). Participation was not required, but employees who did not participate were charged an extra $20 per pay period for their health-insurance coverage.

The court concluded the plan qualified for the underwriting safe harbor under the ADA and so did not violate the ADA. The wellness program was deemed to be a "term" of a bona fide benefit plan (the employer's major-medical plan), even though there was no written document for the wellness program.

There is a well-worn axiom that bad facts make bad law. This case may be the mirror image of that - good facts making unusually good law. The employer wasn't trying to do too much with its wellness plan. Most aspects of the plan ultimately benefited the participating employees. For example, employees identified as having asthma, diabetes, and high blood pressure qualified for additional healthcare services (at no cost) and copay waivers for certain medications. And, perhaps more importantly, the employer didn't try to be too coercive in getting employees to participate. Employees who declined to participate were subject to a modest cost increase for health insurance, but were not denied access to insurance altogether, as some plans will do. Whether the same result would be reached in the case of a more aggressive plan is difficult to say.

It is also notable that the court did not even consider whether the wellness plan would pass muster under the ADA as a "voluntary" plan. The court ruled favorably on the safe-harbor issue and left it at that. Most practitioners would tend to view a plan of this nature as not unreasonable or coercive and, thus, likely to clear the ADA based on voluntariness. But it would have been nice to get some affirmation of that.

The case is Seff v. Broward County, No. 11-12217 (11th Cir. Aug. 20, 2012). Prior discussion of wellness plans is available here.

 


Editors
Don Berner Image
Don Berner, the Labor Law, OSHA, & Immigration Law Guy
Boyd Byers Image
Boyd Byers, the General Employment Law Guy
Jason Lacey Image
Jason Lacey, the Employee Benefits Guy
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