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EEOC continues to press employer over its wellness program

EEOC continues to press employer over its wellness program

The U.S. Equal Employment Opportunity Commission is not backing down from its lawsuit challenging a Baraboo, Wisconsin-based employer's use of health risk assessments and biometric screenings in its wellness program.

In a motion for summary judgment against plastics manufacturer Flambeau Inc. filed July 16 in U.S. District Court in Madison, Wisconsin, the EEOC said the company's practice of requiring employees to complete health risk assessments and biometric screenings in order to be eligible for coverage in its group health insurance plan violates provisions of the Americans with Disabilities Act.

The EEOC's motion was filed in response to Flambeau's July 15 request to have the agency's October 2014 lawsuit dismissed on the grounds that the assessment and screening requirements were protected under safe harbor provisions of the ADA because they were terms of a bona fide health benefit plan and were based on “underwriting risks, classifying risks or administering such risks.”

Additionally, Flambeau and its attorneys argued that the assessments and screenings did not violate ADA rules requiring that employee participation in wellness programs be entirely voluntary, since noncompletion only restricted eligibility for health care coverage, not employment.

Flambeau ceased using the wellness tests, which it had used in the 2012 and 2013 plan years, as an eligibility requirement for its health plan in January 2014.

“It's a good test case for the baseline issue here, which is how should employers interpret the safe harbor provisions of the ADA,” said James Napoli, a Washington-based partner at Seyfarth Shaw L.L.P. “I think perhaps the reason the EEOC took this case in the first place is that (Flambeau's) approach to its wellness program is pretty much as aggressive as you can be within the safe harbor.”

Experts say the EEOC's motion for summary judgment against Flambeau is a strong indication that the agency intends to continue actively enforcing rules under the ADA and other federal laws governing employers' use of employee wellness programs and incentives, including new rules proposed earlier this year that would specifically prohibit employers from denying health care coverage to employees that do not participate in health risk assessments, biometric screenings or other wellness-related activities.

“I think the big picture here is that the EEOC basically wants to interpret the ADA in such a narrow way that it would essentially write out the safe harbor provisions for bona fide health plans,” said Frank C. Morris Jr., head of Epstein Becker & Green P.C.'s labor and employment practice in Washington.

In its motion for summary judgment against Flambeau on the matter of the company's liability under the ADA, the EEOC argued that requiring employees to complete wellness screenings or activities in order to qualify for health care coverage does not constitute a voluntary program.

“In common understanding, mandatory is the opposite of voluntary, and no employer can in good faith claim its tests and inquiries are both at the same time,” the EEOC argued in its motion. “If additional proof on this point were needed, the dictionary definition of 'mandatory' in this context is 'containing or constituting a command.'”

Katy Spangler, senior vice president of health policy at the Washington-based American Benefits Council, said it was troubling to see the EEOC continue to pursue litigation against an employer for allegedly violating rules that had not been proposed at the time the lawsuit against Flambeau was filed and still have not been finalized.

“The idea that they would continue to pursue action against employers as if the rules have been finalized doesn't seem like a fair way to go,” Ms. Spangler said. “Our employer members take their compliance obligations very seriously. They were blindsided when the EEOC started pursuing litigation without having put a marker down as to what they viewed to be voluntary or not.”

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