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The Wagner Law Group

The Wagner Law Group, A Professional Corporation, is a nationally recognized ERISA & employee benefits, estate planning, employment, labor & human resources practice. 

 

Established 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.

 

 

 

 

Contact Info

The Wagner Law Group

 

  Integrity | Excellence

  

Boston 

Tel: (617) 357-5200 

Fax: (617) 357-5250 

99 Summer Street 

13th Floor

Boston, MA 02110


Palm Beach Gardens 

Tel: (561) 293-3590
Fax: (561) 293-3591
7108 Fairway Drive
Suite 125
Palm Beach Gardens, FL 33418

   

Tampa

Tel: (813) 603-2959

Fax: (813) 603-2961

101 East Kennedy Boulevard

Suite 2140
Tampa, FL  33602 

 

San Francisco

Tel: (415) 625-0002

Fax: (415) 358-8300

300 Montgomery Street

Suite 600

San Francisco, CA 94104

 

St. Louis

Tel: (314) 236-0065

Fax: (314) 236-5743
100 South 4th Street, Suite 550
St. Louis, MO  63102 

 

www.wagnerlawgroup.com

 

 

 

 

October 20, 2016

 

 Health and Welfare Law Alert

 

 

 

Court Says Employer Can Require Health Risk Assessments for Medical Coverage  

 

 

 

A U.S. 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. 

 

 

Applicable 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:

 

  • participation in the program is voluntary;
  • information obtained is kept confidential in accordance with ADA rules; and
  • information 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 30%. 

 

 

 

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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This Newsletter is provided for information purposes by The Wagner Law Group to clients and others who may be interested in the subject matter, and may not be relied upon as specific legal advice.  This material is not to be construed as legal advice or legal opinions on specific facts. Under the Rules of the Supreme Judicial Court of Massachusetts, this material may be considered advertising.