The Wagner Law Group
Wagner Law Group, A Professional Corporation, is a nationally
recognized ERISA & employee benefits, estate planning,
employment, labor & human resources practice.
in 1996, The Wagner Law Group has 25 attorneys engaged
exclusively in employee benefits, estate planning and
employment law. Six of our attorneys are AV rated by
Martindale-Hubbell as having very high to preeminent legal abilities
and ethical standards. The firm is among the largest ERISA boutiques
in the country. Our practice is national in scope, with clients in
more than 40 states and several foreign countries.
Wagner Law Group
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October 20, 2016
Health and Welfare Law
Court Says Employer Can
Require Health Risk Assessments for Medical Coverage
District Court has determined, in EEOC v. Orion Energy Systems,
Inc., that an employer's wellness program, which requires
employees who had enrolled in its group health plan to undergo health
risk assessments or pay full premium costs, was voluntary and did not
violate the Americans with Disabilities Act ("ADA").
Nevertheless, the court indicated that, going forward, the EEOC's
recently-issued regulations, which limit the incentive that employers
can provide for a wellness program, is enforceable.
Law. The ADA limits
when employers may require employees to undergo medical examinations
or provide answers to medical inquiries. However, voluntary
medical examinations and inquiries are allowed as part of an employee
wellness program if:
in the program is voluntary;
obtained is kept confidential in accordance with ADA rules; and
obtained is not used to discriminate against the employee.
The ADA defines a voluntary
wellness program as one that neither requires employees to
participate nor retaliates against employees for non-participation.
Furthermore, the ADA contains a safe harbor
providing that the limitation on when employers may require employees
to undergo medical exams should not be used to prevent employers from
sponsoring group health plans.
Background. In Orion, the employer implemented a wellness
program that included a health risk assessment
("HRA"). Under the wellness program, the employer
would pay the full cost of medical coverage for any employee who
completed an HRA. However, any employee who refused to
participate in the HRA was required to pay the full cost of coverage.
The EEOC sued the employer, claiming that its
wellness program did not comply with ADA requirements because
employee participation was not voluntary (due to the fact that it
shifted the full premium costs onto employees that refused to undergo
an HRA). The EEOC also asserted that the ADA safe harbor did
not apply to the employer's wellness programs.
District Court Decision. The court ruled that the employer's
wellness program was voluntary and did not violate the ADA. It
reasoned that employees were not compelled to join the wellness
program. Rather, they had a choice of joining the wellness
program and getting free coverage or not joining and paying for their
group health plan coverage. The court said this could be a
difficult choice-but it was still a choice.
Interestingly, the court also determined that the
EEOC's regulations, which excluded application of the ADA safe harbor
to wellness programs, were valid. Accordingly, the court noted
that the employer's wellness program would violate the requirements
of the EEOC's regulations. In addition, the court declined to
retroactively apply the regulation limiting the incentive to
Takeaway for Employers. While the Orion decision may send mixed
messages to employers about compliance with the ADA requirements for
wellness programs, employers are advised to follow the requirements
provided in the EEOC's new regulations going forward.
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