EEOC Settlement and ADA Wellness Plan Rules Enforcement | June 8, 2017

Dan Kuperstein

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The EEOC recently settled a case that allegedly violated the new ADA wellness plan regulations. Certain wellness plan designs and penalties can result in ADA violations. ERISA attorney Dan Kuperstein explains how this settlement provides insight into how the EEOC will be enforcing these new wellness plan rules.

Wisconsin Employer Resolves EEOC Case Involving Wellness Program
ACA(now) – News on Washington

Video Transcript: 
Hi, I’m Dan Kuperstein, and welcome to ComplianceMINUTE.

The EEOC recently settled a case with an employer that had allegedly violated the EEOC’s new Americans with Disabilities Act (or ADA) wellness plan regulations released in May, 2016. The settlement sheds light on how the EEOC will enforce its new wellness plan rules.

The wellness plan at issue had allegedly violated the ADA by requiring employees enrolled in the employer’s self-insured health plan to either complete a health risk assessment (including biometric screenings and a blood draw) or pay 100% of the health plan’s monthly premium.

This settlement arose from a case which began when the EEOC filed suit against the employer in a federal district court in the Eastern District of Wisconsin alleging that the employer’s wellness plan was not “voluntary,” and therefore, violated the ADA since it shifted 100% of the premium cost to an employee who had opted out of the program.

The district court had ruled that the wellness plan’s health risk assessment was voluntary, concluding that even a strong incentive is not the same as compulsion. However, the court agreed to proceed with a trial on the employee’s claim that the employer violated the ADA’s anti-retaliation provisions by terminating her for criticizing the wellness plan and refusing to complete the health risk assessment.

Under the terms of the settlement, the employer agreed to:

  1. Pay the employee $100,000;
  2. Not retaliate against any other employee who objects to the wellness plan;
  3. Not maintain an involuntary wellness program in the future;
  4. Direct employees to send concerns about the wellness plan to the HR department, and
  5. Train employees on the requirements of the ADA.

So, what are the key takeaways here for employers? An obvious takeaway from this settlement is that employers should not require employees to pay the entire premium cost of the health insurance if they opt out of a wellness plan’s health risk assessment. However, even less egregious wellness plan penalties and plan designs can result in a wellness plan violating the ADA’s voluntariness requirements, exposing the employer to significant penalties.

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