Wisconsin Company Sued by EEOC for Wellness Violations

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The US Equal Employment Opportunity Commission (EEOC) recently filed a lawsuit against Manitowoc, WI based Orion Energy Systems Inc.for instituting a wellness program that violated the Americans with Disabilities Act (ADA).  The suit claims that Orion asked health plan enrollees to participate in a medical examination as part of its wellness program.  An employee that refused to participate in the wellness program was required to pay 100% of the premium for health insurance and was eventually terminated for objecting to the wellness program.

The ADA requires any required medical examination of employees to be job related and consistent with business necessity; however, voluntary wellness programs are the exception to this rule.  The definition of a voluntary wellness program has been the subject of debate for years.  How much of a penalty makes a wellness program involuntary?  The EEOC has refused to clarify the definition, leaving it for the courts to decide.  For example, one federal court stated a wellness program was voluntary that required an employee to pay $20.00 more per pay period toward the cost of health insurance.  In this case, the EEOC states that this wellness program was not voluntary because the penalty, requiring an employee to pay 100% of their health premium, was too extreme and that Orion intimidated the employee in violation of ADA protected rights.  

Determining the definition of a voluntary wellness program is more important than ever because employers are eager to take advantage of the increased wellness penalty provisions within the Affordable Care Act. In all likelihood, the definition of voluntary lies somewhere in between requiring employees who do not participate in employer-sponsored wellness programs to pay an extra $20.00 per pay period and 100% of the health insurance premium.  Any guidance on this issue will be welcome to ensure employers can incent employees’ healthy behavior and remain compliant.