Can employees who refuse to undergo a medical examination be forced to pay their full employer-sponsored health care plan premiums?
Well, a federal district court found that an employer’s wellness program didn’t violate the American with Disabilities Act in forcing employees to make such a choice.
In EEOC v. Orion Energy Sys., Inc., 2016 BL 308310, E.D. Wis., No. 1:14-cv-01019, 9/19/16, the U.S. District Court for the Eastern District of Wisconsin denied the EEOC’s motion for summary judgment in the first case to weigh in on the EEOC’s wellness program regulations. (See related story, Orion Can Require Medical Exams for Health Plan Enrollment).
“Employers are striving to sustain comprehensive medical coverage for their employees and many are seeking shared responsibility with their employees in doing so. Clarity on what is permitted in this regard is essential to their success,” Mike Thompson, President and CEO, National Alliance of Healthcare Purchaser Coalitions (formerly the National Business Coalition on Health), told Bloomberg BNA on Sept. 30.
However, the court found that wellness programs don’t fall under the ADA’s safe harbor provisions, which is a win for the EEOC.
At issue in the Orion case are final rules under the ADA regarding wellness programs (RIN 3046-AB01), issued May 17, 2016, by the EEOC.
The EEOC rules allow employers to offer limited financial incentives to encourage employees to participate in wellness programs while remaining in compliance with the ADA.
The ADA prohibits employers from conducting medical examinations and inquiries of employees, unless the examinations or inquiries are voluntary or fall under the ADA’s safe harbor provision (an employer may establish, sponsor, observe or administer a "bona fide benefit plan" based on underwriting risks, classifying risks or administering such risks, if based on or not inconsistent with state law and not used as a subterfuge to evade the ADA's purposes.)
In Orion, the EEOC argued that the company’s examination violated the ADA, while Orion argued that the program fell under the ADA’s safe harbor, and in addition, was voluntary. The court found that participating in the wellness program was voluntary.
ADA Safe Harbor
The ADA has a safe harbor provision that states the law shouldn’t prohibit self-insured employers, like Orion, from establishing and administering benefit plans. On the other hand, the EEOC’s new regulation provides that the safe harbor provision doesn’t apply to wellness programs.
The court found that the safe harbor didn’t apply, but the wellness program was voluntary.
The district court ruled that the EEOC’s regulation is valid and can be applied retroactively, but declined to apply it to Orion’s wellness program, “because Orion’s wellness program was wholly independent from its insurance plan,” it said.
Thus, the court concluded that Orion conducted voluntary examinations pursuant to the ADA and didn’t violate the statute.
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