The Equal Employment Opportunity Commissions new focus on employer wellness programs has many health and benefit managers scratching their heads on what is acceptable when it comes to voluntary health screenings and incentive rules under the Americans with Disabilities Act.
Earlier this month, the EEOC filed suit against Flambeau, Inc. because it said the Baraboo, Wisc.-based plastics manufacturing company violated federal law when it required employee Dale Arnold to complete biometric testing and a health risk assessment. Because Arnold did not complete these tasks, EEOC stated that Flambeau cancelled his medical insurance and pushed 100% of the premium payment into his lap. For those employees that participated in the program, the EEOC said they were required to pay just 25% of their premium cost.
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Similarly, the EEOC said in an August lawsuit that Orion Energy Systems, a public company that offers technology and service solutions for the lighting and energy retrofit marketplace, allegedly fired employee Wendy Schobert after she declined to participate in the Wisconsin companys wellness program. The program required medical examinations, which made disability-related inquiries, according to the EEOC.
Flambeau, wholly owned by Nordic Group of Companies, and Orion Energy Systems did not immediately respond to our requests for comment.
Mark Perriello, president and CEO of the American Association of People with Disabilities the nations largest disability rights organization says there is a more clear-cut way for employers to comply with the ADA. Basically for a wellness and health program to comply with the ADA, it needs to be voluntary, Perriello says. When an employer requires someone to participate [such as a biometric test and a health risk assessment test] thats a clear violation of the ADA.
Meanwhile, Gretchen K. Young, senior vice president of health policy at the ERISA Industry Committee, a nonprofit association that represents employer interests in employee benefits and compensation issues, explains the enforcement agency needs to offer more guidance and file fewer lawsuits. But, Young says, the issue is: What does it mean to be voluntary?
In general, you have to give us guidance, you cant give guidance via lawsuit, says Young. She adds that structuring of the incentives as penalties rather than rewards is also unclear. Weve had hints over the years that EEOC does not like the negative penalty, Young notes.
Kaiser Family Foundation reports that about 94% of employers with over 200 workers, and 63% of smaller employers, offer some kind of wellness program to their workforce. Also, while half of U.S. employers offer wellness programs according to the RAND Employer Survey, roughly 80% of employers with wellness programs screen their employees for health risks, which are used for program planning and evaluation.
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Under the ACA, the maximum permissible reward for health-contingent or outcomes-based wellness programs, such as those programs that require employees to meet a specific health-related goal for a reward, cant exceed 30% of the cost of health coverage. For tobacco cessation, the maximum reward can be as high as 50%.
On the one hand youve got the ACA with implementing agencies, which are Treasury, HHS and DOL; those three agencies, under the ACA, are saying here the 30% applies to these activities, Young states. For us, out of left field, comes the EEOC, not with guidance, but with a lawsuit saying this particular situation violates the ADA.
When asked if ERIC expects any clarity from the EEOC, Young was skeptical. In general, nobody wants an EEOC lawsuit and if there is other guidance out there, let us know. Thats the message, she says.
