Vital signs: make sure your work wellness program is healthy.

• Author: Walch, John D.
• Position: Legal Brief

Wellness programs sound great.

They attack one of the root causes of rising healthcare costs: increasing demand for healthcare. By helping employees become healthier, and avoiding medical intervention, an employer will pay less for providing health coverage to those employees. Employees like being healthy, so they are happy, too. So why isn't everyone doing it?

In general, there are two types of wellness programs. Health-contingent programs require employees to meet a specific health outcome, such as a target weight, cholesterol level or blood pressure. Participatory programs indirectly support healthy lifestyles with incentives such as diagnostic testing or screening, smoking cessation classes or gym membership reimbursements. As a result, they avoid many of the potential problems that health-contingent programs have with the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA).

The Equal Employment Opportunity Commission (EEOC), the federal agency that enforces the ADA and GINA, began aggressively challenging health-contingent wellness programs in 2012. Two recent cases illustrate the EEOC's concern:

In a lawsuit against Orion Energy Systems in Wisconsin, the EEOC claimed Orion's program violated the ADA because it required employees to complete a health-risk questionnaire and screening. Orion argued that its wellness program did not violate the ADA because it complied with a "safe harbor" provision in the ADA that shields such programs from liability if they are "voluntary." The court ruled in September that Orion's wellness program did not violate the ADA because it was voluntary, despite the fact that not participating in it meant that an employee had to pay 100 percent of the employee's healthcare premiums.

The EEOC also sued Flambeau, Inc. (also in Wisconsin) after Flambeau discontinued an employee's health insurance when he refused to take a health risk assessment and biometric test as part of Flambeau's wellness program. The court ruled that Flambeau's wellness program also fell under the ADA's safe harbor. The EEOC has appealed, as it likely will with Orion.

A key issue in these lawsuits is the ADA's safe-harbor provision, which exempts wellness plans from the ADA restrictions if the plan is associated with a voluntary insurance program. In response to these and other recent cases that employers won, the EEOC recently issued new regulations that provide this statutory safe harbor is not...