Court’s wellness ruling is good news, but beware of ACA interaction

by Christian Schappel

Employers and employer-side attorneys have been celebrating a recent court ruling that shot down an EEOC lawsuit. The suit claimed major components of an employer’s wellness program were illegal. But the celebration may be short-lived due to the ACA. 

The lawsuit

The EEOC sued Flambeau Inc., a plastics manufacturer, claiming its wellness program violated the ADA because it required workers to submit to “medical examinations” that weren’t job-related or part of a “voluntary” wellness program.

Flambeau had a requirement that stipulated that any employee who wanted to enroll in the company’s health insurance plan had to submit to its wellness program’s biometric screening and health risk assessment. The results of those “exams” would be used in aggregate form to aid in the health plan’s underwriting and risk administration.

The EEOC said the wellness program wasn’t “voluntary” because the non-participation penalty — i.e., the prohibition from enrolling in the company’s health plan — was so steep.

Flambeau fought the lawsuit, claiming the exams fell under an ADA safe harbor that allows employers to conduct activities related to the administration of a bona fide insurance benefit plan.

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