Keeping It Legal -- EEOC Insight on Wellness Programs

When developing and implementing a wellness program, employers need to comply with the Equal Employment Opportunity Commission (EEOC) regulations, portions of which are being finalized this year. Until then, the results of a recent court ruling in EEOC v. Flambeau, Inc. may be of assistance to employers in determining whether employee health information can be gathered to create a program that offers valuable incentives to participating employees.

In this case, Flambeau established a wellness program for its employees in 2011 – initially offering a $600 credit to any worker who participated. By 2012, the company required any employee who wanted to obtain health insurance to complete two of the requirements set out in the wellness program. The first requirement was a health risk assessment, which required employees to complete a questionnaire about medical history, diet, mental health, social well-being and job satisfaction. The second requirement was a biometric screening that included a routine physical exam – height, weight, blood pressure and a blood test. This information was aggregated and used to identify health risks and medical conditions among the workforce to estimate corporate insurance costs and set premium levels. 

One employee refused to complete both requirements and was dropped from Flambeau’s insurance coverage. The EEOC brought an action on behalf of the employee on the grounds of an Americans with Disabilities Act (ADA) violation that bans employer-mandated medical examinations. The judge upheld the employer’s wellness program and ruled that the program fell squarely into the ADA’s “safe harbor” for insurance benefit plans because it met the following conditions:

• The wellness program requirement was a “term” of the employer’s insurance benefit; it was not mandated outside the realm of its insurance benefits offerings. It was also deemed critical by the court that the employer provided adequate advance notice of the wellness program requirements to workers through educational handouts, and that the assessment and testing coincided with the open enrollment period.
• The wellness program requirements were clearly intended to assist the employer with underwriting, classifying or administering risks associated with the insurance plan. The information was collected in aggregate and then directly used to classify health risks to calculate projected insurance costs for the benefit year. 
• The wellness program was not a condition of employment and employees could refuse to participate and remain employed – even though they would have to obtain health insurance elsewhere.
• There was no evidence of discrimination or disability-based distinctions against any specific workers or groups of employees, and the information collected was not used to treat any single employee differently.

Employers looking to establish a wellness program can gain insight from this case; however, the specific law on the ADA’s safe harbor and the administration of health insurance plans could vary based on jurisdiction.  It is advisable, therefore, to check with your counsel to ensure any wellness plan you develop is compliant.

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Trending: Employers Focus on Overall Employee Well-Being

As you evaluate your worksite wellness program this year, or start to make plans to implement one in 2016, read the Workplace Wellness Trends survey prepared by the International Foundation of Employee Benefits Plans. While traditional initiatives such as health risk assessments and wellness challenges continue to be popular, there is a growing trend to add newer, innovative benefits including mental health coverage, financial education, collaborative workspaces, free wearable tracking devices, standing/treadmill desks and encouraging vacation time use. Employers are looking beyond physical wellness and focusing on the overall well-being of their employees.

The survey found that the top traditional wellness initiatives include: 

• Flu shots (71 percent)
• Smoking-cessation (54 percent)
• Health risk assessments (51 percent)
• Health screenings (50 percent)
• Wellness/fitness challenges (42 percent)

The top non-traditional wellness initiatives include: 

• Vacation time/encouraging time off (66 percent)
• Mental health coverage (63 percent)
• Tuition reimbursement (63 percent)
• Community charity drives (57 percent)
• On-site events/celebrations (50 percent)

The survey notes that “organizations are offering wellness initiatives for different reasons—59 percent offer wellness primarily to invest in/increase worker health and engagement, while 41 percent primarily aim to control/reduce health-related costs.” The employers offering wellness programs are getting results. Ninety-three percent of companies that analyze their wellness ROI achieve a positive return on their investment. The survey reports that the average ROI per $1 spent is $3. The organizations that track more specific wellness efforts report improved engagement (54 percent), reduced absenteeism (45 percent), and a positive impact to their organization's bottom line (38 percent). 

If you are looking to implement a wellness program or need help enhancing an existing program, contact us. We take a comprehensive approach to wellness that is custom-tailored to your organization. We have worked with numerous companies to develop innovative programs that utilize cutting-edge wellness trends and research that positively impact the bottom line.

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Visit Wellness Workdays for more information about our worksite wellness programs.