EEOC Files First ADA Challenge of Employer's Wellness Program

Author: Gloria Ju

August 28, 2014

On August 20, the Equal Employment Opportunity Commission (EEOC) filed a lawsuit contending that an employer violated the Americans with Disabilities Act (ADA) by instituting a wellness program that was not voluntary and that required medical examinations and made disability-related inquiries that were neither job-related nor consistent with business necessity. The lawsuit, EEOC v. Orion Energy Systems, is the EEOC's first to directly challenge a wellness program under the ADA.

The lawsuit also alleges that the employer violated the ADA as to an employee who declined to participate in the program. The employer shifted responsibility for payment of the entire premium for the employee's health benefits from the employer to the employee and then fired her shortly after.

"Employers certainly may have voluntary wellness programs - there's no dispute about that - and many see such programs as a positive development," said John Hendrickson, regional attorney for the EEOC Chicago district. "But they have to actually be voluntary. 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."

Earlier hearings by the EEOC on wellness programs revealed that a majority of employers now offer some sort of wellness program - 94 percent of employers with over 200 workers, and 63 percent of smaller ones, according to Karen Pollitz of the Kaiser Family Foundation, which researches issues relating to health care. A June 2014 Kaiser Health Tracking Poll found that 76 percent of the public think it is appropriate for employers to offer wellness programs that promote healthful behaviors, and 62 percent believe it is not appropriate for employers to require nonparticipants to pay higher health insurance premiums.

According to EEOC guidance on disability-related inquiries and medical examinations, the ADA allows employers to conduct voluntary medical examinations and activities, including voluntary medical histories, that are part of an employee health program without having to show that they are job-related and consistent with business necessity, as long as any medical records acquired as part of the wellness program are kept confidential and separate from personnel records. Employees may be asked disability-related questions and may be given medical examinations pursuant to such voluntary wellness programs. A wellness program is voluntary as long as an employer neither requires participation nor penalizes employees who do not participate.

The EEOC was supposed to issue a ruling this past June that would more clearly define voluntary under the ADA as it relates to wellness programs. According to Callan G. Carter, Special Counsel at Trucker Huss, "Although this wellness program's penalties for nonparticipation appear from the limited facts to be extreme, without a bright-line definition of 'voluntary,' which is hopefully in the overdue EEOC guidance, employers will continue to struggle with how a Health Insurance Portability and Accountability Act (HIPAA)-compliant wellness program can comply with the ADA."