EEOC CHALLENGES WELLNESS PROGRAM UNDER ADA

The U.S. Equal Employment Opportunity Commission (EEOC) has charged in a lawsuit that Manitowoc, Wisconsin-based Orion Energy Systems violated federal law by requiring an employee to submit to medical exams and inquiries that were not job-related and consistent with business necessity as part of a wellness program, which was not voluntary, and then by firing the employee when she objected to the program.

The federal agency contends that Orion instituted a wellness program that required medical examinations and made disability-related inquiries.  When employee Wendy Schobert declined to participate in the program, Orion shifted responsibility for payment of the entire premium for her employee health benefits from Orion to Schobert.  Shortly thereafter, Orion fired Schobert.

The EEOC maintains that Orion’s wellness program violated the Americans with Disabilities Act (ADA) as it was applied to Schobert, and that Orion retaliated against Schobert because of her good-faith objections to the wellness program.  The EEOC further asserts that Orion interfered with Schobert’s exercise of her federally protected right to not be subjected to unlawful medical exams and disability-related inquiries.

The EEOC brought the suit under Title I of the ADA, which prohibits disability discrimination in employment, after first attempting to reach a pre-litigation settlement through its conciliation process.  The case, (EEOC v. Orion Energy Systems, Civil Action 1:14-cv-01019) was filed in U.S. District Court for the Eastern District of Wisconsin, Green Bay Division, and is assigned to U.S. District Judge Chief Judge William C. Griesbach.

The EEOC filed another disability discrimination suit against Orion in May 2014 (EEOC v. Orion Energy Systems, Civil Action No. 14-cv- 00619). In that lawsuit, the EEOC contended that Orion fired Scott Conant after he experienced a disabling condition that substantially limited his ability to walk and required that he use a wheelchair.  The EEOC said that Conant’s termination followed his request for accommodations, such as an automatic door opener, to allow him to enter and exit the Orion workplace.  Orion never installed a door opener while Conant worked there.

This most recent lawsuit is the EEOC’s first to directly challenge a wellness program under the ADA.  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 the Kaiser Family Foundation, which researches issues relating to health care.

The ADA limits the circumstances under which an employer may require physical examinations or answers to medical inquiries.  However, voluntary medical exams and inquiries are permitted as part of an employee health plan if:

  • Participation in the program is voluntary;
  • Information obtained is kept confidential in accordance with the ADA requirements; and
  • Information obtained is not used to discriminate against an employee.

The EEOC has not issued formal guidance as to what is voluntary, but in informal guidance the EEOC has said that compliance with the Health Insurance Portability and Accountability Act (HIPAA) rules for wellness plans, which have generally been incorporated into health care reform, does not ensure compliance with the ADA or other laws.  According to a letter from the EEOC, an employer’s requirement that employees participate in a health risk assessment as a condition of eligibility for its health plan violates the ADA.

The EEOC, which enforces the ADA, has questioned whether mandatory wellness programs or those that include penalties for noncompliance (as opposed to a reward for participation) would be permitted under the ADA.  However, the EEOC has not issued formal guidance.

The applicable regulations define a voluntary wellness program as one that neither requires employees to participate nor penalizes employees for non-participation.  The EEOC has informally suggested that a wellness program may not be considered voluntary if the program includes a mandatory health risk assessment or a punitive trigger, which seems to be the case with Orion.

To date, there has only been one court case that addressed the question of whether a wellness program violated the ADA.  For more information about that case, see: http://dmeclegal.wordpress.com/2011/05/06/court-rules-wellness-program-does-not-violate-ada/#more-629.

That case did not address whether the wellness program was voluntary.  Employers should be aware that the ADA may prohibit severe penalties under wellness programs and should monitor this case and other developments. Positive incentives are less likely to run afoul of the ADA.

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