Quirky Question #270: A Win for Wellness Plans
Question: Our company offers employees a self-funded and self-insured health plan. We’d now like to implement a wellness program. Can we require employees to complete a health risk assessment which requests personal medical information before they are eligible to participate in the health plan? I’ve heard that asking for employee medical information, even if it’s pursuant to a wellness program, could violate the Americans with Disabilities Act.
Answer: By Gabrielle Wirth and Pavlina Kochankovska Rafter
Though the ADA generally bars medical exams and inquiries absent a showing a “business necessity” under 42 U.S.C. §12112(d)(4)(A), there exists a “safe harbor” provision in 42 U.S.C. §12201(c)(2) which may allow your company an exemption for such inquiries under the terms of a bona fide benefits plan.
The general rule contained in 42 U.S.C. §12112(d)(4)(A) provides that a “covered entity shall not require a medical examination . . . unless such examination is shown to be job-related and consistent with business necessity.” However, the insurance “safe harbor” provision in 42 U.S.C. §12201(c)(2), provides that the ADA “shall not be construed to prohibit or restrict” an employer from establishing or administering “the terms of a bona fide benefit plan that are based on underwriting risks, classifying risks, or administering such risks.”
Recently, a federal district court in Wisconsin addressed the “safe harbor” provision in the context of a wellness plan. In EEOC v. Flambeau, Inc., 2015 BL 436342. (W.D. Wis. Dec. 30, 2015), the EEOC challenged Flambeau’s policy conditioning participation in its employee health insurance plan on completing a “health risk assessment” and “biometric screening test” pursuant to a wellness program. Failure to participate in the wellness program resulted in termination of health insurance. The assessment included a questionnaire about medical history, diet, mental and social health and job satisfaction. The biometric test involved height and weight measurements, a blood pressure test and blood draw, among other things. Other than information regarding tobacco use, any health risks and medical conditions identified were reported to Flambeau only in the aggregate, so that it did not know any participant’s individual results. Flambeau then “used this information to estimate the cost of providing insurance, set participants’ premiums, evaluate the need for stop-loss insurance, and adjust the co-pays for preventive exams and certain prescription drugs. Defendant also sponsored weight loss competitions, modified vending machine options and made other “organization-wide changes” aimed at promoting health in light of the fact that a high percentage of defendant’s employees appeared to suffer from nutritional deficiencies and weight management problems.”
The EEOC argued that Flambeau violated § 12112(d)(4)(A) by requiring its employees to complete the wellness program’s health risk assessment and biometric screening tests before they could enroll in defendant’s health insurance benefit plan. Flambeau filed for summary judgment, arguing that the requirement fell within the safe harbor provision set forth in 42 U.S.C. §12201(c)(2) since it was related to the administration of a bona fide insurance benefit plan. Further, Flambeau argued that the assessment and test were not “required” so it was not prohibited by §12112(d)(4)(A).
The EEOC contended that the voluntary “employee health program” exception provided in §12112(d)(4)((B) is the only exception applicable to wellness programs, and that provision was inapplicable as Flambeau’s wellness plan was not voluntary. The EEOC further argued that the application of the safe harbor provision would in effect nullify § 12112(d)(4)(B)’s exception for voluntary tests or inquiries that are part of an employee health program.
The Court granted summary judgment in favor of Flambeau. The Court found that the safe harbor provision protects employers from liability even if the medical exams and inquiries are also covered under §12112(d)(4)(A), pointing out that though they may overlap at times, each provision provided different protections. The Court ruled that Flambeau’s program was a “term” of the company’s bona fide insurance plan and was “clearly intended to assist … with underwriting, classifying, or administering risks associated with the insurance plan.” The court found it unnecessary to address the arguments as to whether the testing is actually “required” and therefore prohibited under §12112(d)(4)(A).
Further, the court rejected the EEOC’s argument and concluded that Flambeau was not using the safe harbor provision as “subterfuge to evade” the ADA’s anti-discriminatory purpose given that program does not make disability-based distinctions. To the contrary, Flambeau’s wellness program required all employees who wanted insurance to complete the wellness program before enrolling.
Based on this ruling, the safe harbor provision, 42 U.S.C. §12201(c)(2), should apply if the health information collected in the health risk assessment is used in aggregate to assist the Company with underwriting, classifying, or administering risks associated with its self-funded plan.
*Note that the analysis here applies only to wellness programs and the ADA. Wellness programs must also comply with the Affordable Care Act (ACA) and the Genetic Information Non-Discrimination Act (GINA). HIPAA provisions generally prohibited discrimination in health benefits prior to the enactment of the ACA, which has carved out exceptions for wellness programs. Under GINA, which impacts the design and administration of wellness programs, in order for an employer to request or require genetic information from an employee or employee’s family member, certain conditions must be satisfied. See 42 U.S.C. § 2000ff-1(b).