A federal district court in Wisconsin has upheld an employer-sponsored wellness program against a challenge by the Equal Employment Opportunity Commission (EEOC) that the program violated the Americans with Disabilities Act (ADA).

In EEOC v Flambeau, the court ruled that the wellness program qualified for a safe harbor under the ADA that permits an employer to establish and administer “terms of a bona fide benefit plan that are based on underwriting risks, classifying risks, or administering such risks.” In this case, information gathered from the wellness program was presented to the employer in aggregate form that could not be identified to any individual participant. The employer then used this aggregate data for estimating insurance costs, setting participant premiums, and other permissible activities under the ADA safe harbor.

The case follows the reasoning set forth in another wellness program case, Seff v Broward County, but there are a few significant aspects to this new case:

  • Seff involved a situation where a health plan participant was required to contribute a modest additional amount toward the cost of group health coverage if the participant did not participate in a wellness program. In Flambeau, employees were required to participate in the wellness program as a condition of qualifying for health coverage.
  • The EEOC did not actually participate in the Seff case. The EEOC brought the lawsuit against Flambeau, as one of three major challenges to wellness programs in 2014.
  • The EEOC has proposed regulations on wellness programs under both the ADA and the Genetic Information Nondisclosure Act. The EEOC is reportedly looking to finalize its regulations in the coming months. In issuing the proposed ADA regulations, the EEOC specifically explained that it did not believe that the reasoning in Seff should apply to its enforcement of ADA rules.

It remains to be seen how the decision in the Flambeau case will affect the final regulations issued by the EEOC and how those final regulations will, in turn, factor into future court decisions.

Attorneys in Ballard Spahr’s Employee Benefits and Executive Compensation Group regularly provide counsel and representation on matters related to employer-sponsored wellness programs. As federal health care reform effort has gained steam, we established the Health Care Reform Initiative to monitor and analyze developments in health care reform legislation, including those related to wellness programs. Through tracking legislative changes and court decisions, our attorneys are assisting health care entities and employers in understanding the relevant impact of these changes and decisions, and how to plan for the future. For more information, please visit the Health Care Reform Dashboard, our online resource center for news and analysis on these and more recent developments.