Wisconsin Employers May Use More Wellness Incentives After Ruling



A Wisconsin federal district court has rejected the EEOC's Americans with Disabilities Act legal challenge to a portion of Flambeau Inc.’s wellness program policy, requiring employees to submit to health risk assessments and biometric screenings (EEOC v. Flambeau, Inc., 2015 BL 436342, W.D. Wis., No. 14-638, 12/30/15).

At issue in the Flambeau case was an employee who declined to answer a health-care questionnaire or to undergo biometric testing, which resulted in the employee being penalized by not being allowed to participate in the company’s health-care benefits plan.

In response to the Flambeau ruling, Larry Boress, president and CEO, Midwest Business Group on Health, Jan. 21 told Bloomberg BNA that “The decision by the Wisconsin court will help employers-–at least those in the state-–to be more confident in structuring incentives that truly motivate employees to become engaged or at least knowledgeable about their own health.”

Many employers use incentives or rewards (for example, cash or gift cards) or penalties or disincentives (for example, health care premium surcharges) to encourage employee participation in wellness program initiatives, including HRAs and biometric screenings.  

“The Court's decision in this case is a great win for employers,” Lauren Chana, Esq., assistant counsel, The Vitality Group, told Bloomberg BNA, Jan. 21.  

“It reminds the EEOC that the Safe Harbor under the ADA is well established and cannot be broadened,” Chana added.

“However, this decision will only provide minimal clarity for those wellness programs which function as an aspect of the employers' health plan, as we are yet to see clear insight as to how many of these rules apply to stand alone wellness programs-- regardless of their connection to the administration of a plan,” Chana said.

In granting summary judgment to Flambeau Inc., Judge Barbara B. Crabb Dec. 30 ruled that 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 Inc.'s self-insured health benefits plan. 

Acknowledging that 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(d)(4)(A).

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

Meanwhile, 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.

See related story, Ruling in EEOC Wellness Plan Case Could Be Harbinger.

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