Ruling in EEOC Wellness Plan Case Could Be Harbinger

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By Kevin McGowan

Jan. 4 — A Dec. 30 decision by a federal district court in Wisconsin rejecting the Equal Employment Opportunity Commission's Americans with Disabilities Act challenge to a plastic manufacturer's wellness program testing requirements could presage how other judges will view the ADA's effects on such programs, an attorney representing the employer said Jan. 4 (EEOC v. Flambeau, Inc., 2015 BL 436342, W.D. Wis., No. 14-638, 12/30/15).

In granting summary judgment to Flambeau Inc., Judge Barbara B. Crabb ruled an ADA “safe harbor” provision for the terms of a bona fide benefits plan shielded the company from liability under the ADA for requiring its workers to complete a health risk assessment and undergo “biometric screening” to participate in Flambeau's self-insured health benefits plan.

Acknowledging the U.S. Court of Appeals for the Seventh Circuit has yet to consider the issue, Crabb said the safe harbor provision, codified at 42 U.S.C. § 12201(c)(2), can protect employers from liability even if the medical exams and inquiries are covered by a separate ADA provision that generally bars such tests absent a showing of “business necessity” (codified at 42 U.S.C. § 12112 4(d)(4)(a)).

Court Cited 11th Cir

The district court cited with approval the U.S. Court of Appeals for the Eleventh Circuit's decision in Seff v. Broward Cnty., 691 F.3d 1221, 26 AD Cases 1153 (11th Cir. 2012), which held a county wellness program that sought employees' personal medical information as part of its group health coverage and charged nonparticipants $20 per pay period fit within the ADA's safe harbor for insurance plans.

The EEOC, which currently is considering ADA proposed rules that address when employer wellness plan incentives comply with the act (33 HRR 397, 4/20/15), believes that Seff was wrongly decided.

The agency had no immediate comment on Crabb's ruling, as an EEOC spokesperson Jan. 4 said the commission is still reviewing the decision.

But an EEOC appeal to the Seventh Circuit seems probable, as the Eleventh Circuit is the only federal appeals court to discuss at length the ADA's safe harbor provision in the wellness plan context.

Permissible Data Use, Court Said

The district court “got it right” regarding its ADA interpretation, and Flambeau had “excellent facts” to support its assertion of the ADA exception for administering bona fide benefit plans, said Stephen A. DiTullio, a Madison, Wis., attorney who represents the company.

None of the employees' individual health information was made available to Flambeau, which uses the aggregate data to set premiums and otherwise administer its self-insured plan, DiTullio told Bloomberg BNA Jan. 4.

An employee who declined to answer the health-care questionnaire or undergo the biometric test couldn't participate in Flambeau's health-care benefits plan but otherwise wasn't penalized, the court said.

DiTullio said his impression is “a lot of employers who have gone in this direction” of collecting aggregate health data as part of wellness programs were awaiting the court's ruling.

The decision could “shed some light” on how courts will view the ADA safe harbor issue as applied to wellness programs, said DiTullio, who is with DeWitt Ross & Stevens in Madison.

The ADA's safe harbor should apply if the aggregate health information is used for “risk assessment” by an employer in setting insurance plan premiums and making other decisions about plan structure and administration, DiTullio said.

Management Attorney: Ruling Slaps EEOC Approach

The court's decision is “a bench slap” to the EEOC regarding the agency's approach to the wellness plan issue under the ADA, said Gerald L. Maatman Jr., a management attorney with Seyfarth Shaw in Chicago.

But the EEOC will persist, and employers are in for a “dogfight” regarding the ADA's effects on wellness plans that include medical exams and inquiries, Maatman told Bloomberg BNA Jan. 4.

Charles Tyndall in the EEOC's Milwaukee office and Jean S. Kamp in Chicago represented the agency. John C. Gardner of DeWitt Ross & Stevens also represented Flambeau.

To contact the reporter on this story: Kevin McGowan in Washington at kmcgowan@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com