Employment Opportunity Commission ("EEOC") has filed a
lawsuit against a large employer, claiming that its wellness program
violated the Americans with Disabilities Act ("ADA") and
the Genetic Information Nondiscrimination Act ("GINA").
This marks the first time the EEOC has challenged a wellness program
containing the penalties permitted under the Affordable Care Act
Background. EEOC has characterized the biometric screenings
required under the wellness program at issue as medical tests that
are permissible only if voluntary or required by business necessity. (A biometric screening is a short
health examination that indicates the risk for certain diseases and
medical conditions.)The employer
acknowledges that the screenings are not required as a business
necessity and instead claims that the screenings are voluntary or are
a bona fide health plan exception that is permitted under the ADA.
The EEOC disagrees that there is an exception under the ADA that
permits this type of screening.
The EEOC also
claims that the wellness program violates the ADA because the size of
the penalties is so large that the program cannot be called
"voluntary." Under the employer's program, $2,000 of the
$4,000 applicable penalties relate to tobacco use-$1,000 for the
employee and $1,000 for the spouse. Employees who declined the
biometric screening (which, among other things, tested for smoking
status) were automatically treated as smokers.
The ACA wellness
program guidelines allow penalties of no more than 30% of premium
costs, with penalties of up to 50% of premium costs for tobacco
users. EEOC correctly notes that the relevant ACA regulations provide
that compliance with those regulations does not establish compliance
with other laws or regulations governing wellness programs. When
asked to specify the acceptable limits for wellness program
penalties, EEOC responded that it would not draw a single specific
limit but that this employer's penalty levels were not in compliance.
Finally, the EEOC
claims that the biometric screenings violate GINA (with respect to
the testing of employees' spouses), because the screening can provide
information that is protected genetic information.
Legal Proceedings. The EEOC requested that the court issue a temporary
restraining order ("TRO") to enjoin the employer from
imposing penalties on employees for refusing to undergo the biometric
screenings. In support of this request, the EEOC argued that the
privacy invasion could not be remedied once the data had been
collected. Despite this argument, the court refused to issue the TRO,
concluding that it would be easier for the employer to refund the
penalties than to collect the penalties after the final ruling.
Employers. In light
of the claims brought against this employer, the employers most at
risk for an EEOC challenge are those with wellness programs that
impose high penalties (i.e., thousands of dollars), require
biometric screenings, and include spouses in the biometric screening.
Employers with questions about their own wellness programs based on
the EEOC's lawsuit are advised to contact qualified employee benefits
counsel for assistance.