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EEOC lawsuit targets employee wellness programs

September 02, 2014

Is your wellness program voluntary? Are you sure? A recent lawsuit brought by the EEOC here in Wisconsin may cause employers to think twice about whether the incentives offered to employees for enrolling in a wellness program runs afoul of ADA requirements.

The EEOC alleges that a Wisconsin employer instituted a wellness program that required employees to submit to medical examinations which were not job-related or consistent with business necessity, in violation of Section 102(d)(4)(A) of the ADA. According to an EEOC press release, the lawsuit is the first of its kind to be brought by the agency.

Generally, the ADA permits employers to require medical examinations of their employees only when such an examination is related to the employee’s job position and “consistent with business necessity.” The single exception to this rule is with regard to employee wellness programs. If any employee is enrolled in a voluntary wellness program, an employer may conduct voluntary medical examinations of their employee within the scope of the program.

In this case, the EEOC claims that the financial penalties incurred by employees who chose not to participate in the employer’s wellness program were so severe that the wellness program could no longer be considered truly “voluntary” under the ADA. Specifically, the EEOC alleges that the employer’s program covered the entire amount of health care costs for employees who participated in the program, but required employees who opted-out of the program to cover the entire premium cost of coverage. In addition, the employer allegedly assessed a penalty of $50 per month on employees who declined to participate in the fitness component of the program. The EEOC argues that the economic impact of “opting out” of the employer’s wellness program is so severe that it does not amount to a true choice, which is required by the ADA in order to fit within the wellness program exception.

In addition to challenging the “voluntariness” of the employer’s wellness program, the EEOC brings additional claims against the employer for allegedly firing—in retaliation—an employee who complained about the program.

This case is another example of the EEOC’s increased scrutiny of employer policies and practices, and litigation enforcement. It also should serve as a reminder that now is the time for employer’s to re-examine their wellness programs.

If you have concerns about whether or not your wellness program meets the EEOC’s “voluntary” standard, we encourage you to contact a member of the Godfrey & Kahn Labor, Employment & Immigration Practice Group.

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