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CVS employee sues drugstore chain over wellness fee

CVS employee sues drugstore chain over wellness fee

A CVS Pharmacy cashier in the Oakland, Calif., area claims in court that the company's practice of penalizing its employees for not completing a wellness examination violates California wage and hour laws.

In a lawsuit against one of CVS Caremark Corp.'s local subsidiaries in California, filed earlier this month in an Alameda County, Calif., Superior Court, cashier Roberta Watterson claims the $600 annual health insurance surcharge CVS employees face if they fail to complete a health risk assessment and biometric screening is illegal under a provision of the state's Labor Code.

“The result of the policy is to improperly deduct from earned and vested employee wages,” according to Ms. Watterson's lawsuit.

Section 221 of California's Labor Code broadly prohibits employers from collecting any part of wages previously paid to their employees. However, a separate section of the Labor Code permits deductions made to cover insurance premiums and other benefit contributions.

A CVS Caremark spokesman said in an email to Business Insurance that the $600 is assessed against employees enrolled in the CVS group health care plans as a surcharge to their premium contributions for nonparticipation in the company's wellness exams, not as a deduction to their gross or net wages.

“We ask our employees who choose to receive health coverage through the company to complete a confidential annual health risk assessment and health screening,” the spokesman said. “Those colleagues who complete the assessment and screening pay a lower annual premium for their health coverage.”

“Our employee health benefits plan complies with all applicable laws, and we believe this complaint has no merit,” he said.


Ms. Watterson's attorney, Shaun Setareh, said in a telephone interview with Business Insurance that he thinks the penalty constitutes a separate deduction from employees' benefits withholdings.

“Not only is it a separate charge, but under California law, the company should be responsible for paying Ms. Watterson for the time she spent filling out the exam,” Mr. Setareh said, noting that Ms. Watterson is also seeking compensation for the unpaid time and expenses — including the $25 co-pay and travel costs — she incurred in completing the health risk assessment and biometric screening.

Additionally, Ms. Watterson has asked an Alameda County judge to certify her lawsuit as a class action on behalf of other CVS employees who have been subjected to the $600 surcharge.

While Ms. Watterson's lawsuit specifically mentions that CVS' health risk assessment includes “a variety of personal questions” pertaining to her weight, body fat, smoking and drinking habits and whether she is sexually active, her lawsuit does not include any allegations that her privacy was invaded.

A copy of Ms. Watterson's complaint is available here.