Employer's Wellness Program With "Penalties" Held Lawful Under Americans With Disabilities Act's Safe Harbor

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An employer-sponsored wellness program involving a penalty measure was recently upheld by an appeals court, which ruled that the program was not discriminatory under the Americans with Disabilities Act, according to a brief from law firm Epstein Becker Green.

Broward County in Florida sponsored and established a wellness program in October 2009 as part of its insured group health plan. In Seff v. Broward County, the Court of Appeals for the Eleventh Circuit found the plan fell under the ADA's safe harbor provision for benefit plans.

Although health plan participants were not required to participate in the program, employees who did not undergo a screening to measure glucose and cholesterol or take an online risk assessment incurred a $20 bi-weekly charge from their paychecks.

Current and former county employees who incurred that bi-weekly fee filed a class-action lawsuit in the U.S. District Court for the Southern District of Florida. They claimed the wellness program's screening and risk assessment violated the ADA's prohibition of non-voluntary medical exams and disability-related inquiries.

The court was most interested in whether the wellness program was a "term" of a bona fide benefit plan. The district court determined this was the case based on three factors:

1. The insurer offered the wellness program as part of its contract to provide insurance. It also paid for and administered the program.
2. The wellness program was available only to plan enrollees.
3. The county presented a description of the wellness program in several employee benefit plan handouts.

"Employers with or considering wellness programs should strongly consider making any wellness program a clear term of a bona fide benefit plan. By doing so, employers can point to the safe harbor for ADA compliance and thus alleviate concerns regarding whether the wellness program violates the ADA's otherwise applicable 'voluntary' rules," according to the brief.

If a wellness plan is not part of a bona fide benefit plan, attorneys from Epstein Becker Green said employers should ensure participation is voluntary and that employees are not required to disclose disability-related information on a health assessment to participate in the program. Such activity could run afoul of the ADA as it is currently interpreted by the Equal Employment and Opportunity Commission.

More Articles on Hospital Wellness Programs:

Survey Shows Rise of Employee Wellness Programs at Hospitals in New York, New Jersey and Connecticut
The New Competitive Edge for Hospitals and ACOs: Employee Health
Survey: Employer-Sponsored Healthcare Costs to Rise 7% in 2013


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