EEOC Targeting Wellness Programs

 

The EEOC recently filed suit against Honeywell International, Inc., alleging that its employee wellness program, which includes biometric screening, violates both the ADA and GINA.  This marks the third EEOC suit challenging employer wellness programs.  The first two cases, EEOC v. Orion Energy Systems and EEOC v. Flambeau, Inc., appear to involve more extreme penalties for refusal to participate in biometric medical testing.  In both Orion and Flambeau, the EEOC alleged that the employers shifted the entire health coverage premium onto employees who refused to submit to health assessments.  In Orion, an employee was allegedly fired for refusing to participate in the wellness program, while Flambeau involved an alleged threat of undefined "disciplinary action" for employees who failed to undergo testing.

Honeywell appears to involve a less extreme program.  The EEOC alleges that Honeywell assesses a $500 surcharge for failing to undergo screening, and that the company also assesses a $1000 “tobacco surcharge” on holdouts (and also on holdout spouses), even where refusal to undergo screening is not related to tobacco use.  These surcharges, combined with lost employer contributions to a Health Savings Account, can allegedly total up to $4000 for a given employee.  The EEOC alleges that Honeywell's program is neither voluntary nor job-related, while Honeywell has countered that the EEOC's position is "woefully out of step with the healthcare marketplace."  On Monday, District Judge Ann Montgomery denied the EEOC’s request for a temporary restraining order that would have prevented the imposition of any surcharges for refusing screening.     

The EEOC’s litigation efforts on this front follow public meetings at which the EEOC was repeatedly asked for guidance, given a possible tension between the antidiscrimination statutes and HIPAA, the Affordable Care Act, and the regulations thereunder.  Those regulations permit wellness programs with “health contingent” incentives within certain limits – up to 30% of medical coverage costs, or up to 50% for programs designed to discourage the use of tobacco.  They also permit without limitation purely “participatory” incentives (i.e., where incentives are given to all employees who participate, without regard to specific health benchmarks).

Stay tuned to see whether the EEOC continues to target progressively more mainstream employer wellness programs.

-JB