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EEOC Turns Up the Heat on Employer Wellness Plans

Adding to a flurry of recent activity (see here and here), the EEOC has challenged the wellness plan maintained by Honeywell International, alleging that it violates both the ADA and GINA. The EEOC is seeking a preliminary injunction against Honeywell that would stop further implementation of the plan.

Plan Terms. Based on the facts described in the EEOC’s court filings, Honeywell employees are asked to undergo a biometric screening that includes a blood draw. If the employee has family coverage, the employee’s spouse is asked to complete the biometric screening as well. If employees (or their spouses) do not complete the screening, they pay a “surcharge” on their annual premium of up to $2,500 (a base surcharge of $500, plus tobacco-related surcharges of $1,000 for individual coverage or $2,000 for family coverage). They also lose up to $1,500 in employer contributions to an HSA.

ADA - Voluntariness. The EEOC’s argument under the ADA is that the biometric screening under Honeywell’s plan is not voluntary and, thus, is a prohibited medical examination. Although employees are not required to submit to the biometric screening, the premium surcharges and lost HSA contributions are enough to render the screening involuntary.

ADA - Underwriting Safe Harbor. The EEOC also argues that the wellness plan is not protected by the ADA’s underwriting safe harbor. That safe harbor permits “establishing, sponsoring, observing or administering the terms of a bona fide benefit plan that are based on underwriting risks, classifying risks, or administering such risks that are based on or not inconsistent with State law.” And in Seff v. Broward County (11th Cir. 2012), the safe harbor was held to cover a similar wellness plan. But the EEOC says here that the Seff case is wrong and that the underwriting safe harbor was not intended to cover arrangements like Honeywell’s plan.

GINA. The EEOC’s argument under GINA stems from the requirement under Honeywell’s plan that spouses participate in the biometric screening. This results in a collection of medical information relating to “manifested conditions” of the spouse. A spouse is a “family member” within the meaning of GINA. Medical information relating to manifested conditions of a family member is “genetic information” under GINA. The wellness program provides financial incentives or penalties designed to induce the collection of this information. Therefore, the employer is violating Title II of GINA by inducing employees to provide genetic information.

What About HIPAA and ACA Compliance? Honeywell contends that its plan satisfies the wellness-plan rules under HIPAA and the ACA. But the EEOC says that’s not enough. The ADA and GINA must be satisfied independently. And apparently the EEOC thinks that surcharges, penalties, or lost benefits may render a wellness plan involuntary, even if they are within the limits established under HIPAA and the ACA.

Concerns and Questions. The big concern here is that the EEOC is striking very close to home for many employers. Other challenges brought by the EEOC have targeted plans that were closer to the fringes of commonly accepted wellness-plan design and practice. But the Honeywell plan is pretty near the center. So if the EEOC prevails (and that’s still a very big “if” at this point), many employers could be left scrambling to re-tool their programs.

This case also raises many questions, but a big one is whether the views expressed in the case are the views of the EEOC as a whole or just the office in which the case originated. Employers have been asking (begging!) for guidance from the EEOC on these issues for some time. And although we believe such guidance may be forthcoming, employers continue to find themselves in a no man’s land when trying to understand exactly how and where these various laws intersect.

A copy of the EEOC’s petition for a preliminary injunction is here.

A copy of the EEOC’s memorandum in support of its petition is here.


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