That’s the question at the center of three recent legal cases. Wellness initiatives have been around for years, but they have risen in popularity recently because the Affordable Care Act (ACA) amended portions of HIPAA to allow employers to offer larger incentives for employee participation. In addition, the U.S. Departments of Treasury, Labor, and Health and Human Services have passed rules governing these programs. However, recent legal action has prompted the Equal Employment Opportunity Commission (EEOC) to weigh in. The cases allege their companies’ wellness programs violate the Americans with Disabilities (ADA) Act, among other healthcare-related legislation. Let’s examine the legalities of one of the cases.
EEOC Files Restraining Order
The most recent case involves the EEOC asking a Minnesota federal district judge to grant a temporary restraining order against Honeywell. The order would not allow the company to penalize employees that do not submit to biometric testing for its wellness program.
The EEOC argues that Honeywell’s program violates the ADA because it forces employees to undergo a non-job-related involuntary medical examination. While Honeywell asserts the program is voluntary, the EEOC says non-participation penalties can cost employees up to $4,000 a year, penalties that make participation involuntary. Employees that are deemed eligible have the option of participating in Honeywell’s High Deductible Health Plan and the wellness program.
Results and performance in the wellness program can directly affect claim costs. Employees that earn less than $100,000 annually and participate in the wellness program can also become eligible for the company’s Health Savings Account (HSA), receiving contributions from Honeywell between $250 and $1,500 per year. Employees that refuse the testing do not qualify for the HSA, must pay a $500 surcharge toward their health insurance contribution and are charged $1,000 per person for nicotine use, even if they don’t actually smoke.
In the Company’s Defense….
Honeywell has countered the EEOC arguments by saying its program is in ADA compliance because it falls under the law’s “safe harbor provision.” The ADA’s safe harbor provision protects companies that are gathering data for a benefit plan based on “underwriting risks, classifying risks, or administering such risks that are based on or not inconsistent with state law.” Honeywell also countered that legislation such as the ACA has given incentive-based wellness programs Congressional approval.
As this case illustrates, legislative compliance is not always clear-cut. Health care reform has allowed for even more gray areas. The professionals at [Your company] are experts in all HR areas, including employee benefits. We’ll be watching this case and others closely to see how they develop. Contact us for more information about how our services can help your company.