Arguing over what’s ‘involuntary’ in wellness programs will be ongoing battle

You’ve no doubt heard about the recent pro-employer ruling in the EEOC’s landmark lawsuit against Flambeau Inc.’s wellness plan. But if you think that’s the end of the line, we’ve got some bad news.  

When a court recently dismissed a highly publicized EEOC lawsuit against one employer’s alleged “involuntary” wellness plan, Finance pros everywhere breathed a huge sigh of relief. 

In EEOC v. Flambeau Inc., the EEOC took legal action against Flambeau accusing the employer of maintaining an “involuntary” wellness plan.

Fortunately for Flambeau, a federal judge in Wisconsin agreed with the company’s stance that its wellness exams fell under the ADA’s safe harbor and dismissed the case.

Now the EEOC has appealed that decision in the Seventh Circuit, which has employers everywhere asking: “What happens now?”

What’s at stake?

While the EEOC’s current appeal could go one of two ways, most industry experts agree this won’t be the end of the line for the controversial “involuntary” wellness plan lawsuit.

If the Seventh Circuit upholds the lower court’s decision on this appeal, employer wellness programs — especially those in states within that circuit — will make it extremely difficult for similar ADA claims against employer-sponsored wellness programs to hold up. The EEOC would likely follow this outcome with an appeal to the Supreme Court but, without split verdicts in the circuit courts, the High Court may opt not to hear this case.

On the other, if the EEOC comes out on top with this appeal, a Supreme Court hearing is a virtual guarantee.

How we got here

Here’s a brief refresher on the lawsuit and how we got to where we are right now: Flambeau’s wellness program was set up so that employees who participated in a biometric test and completed a health-risk assessment (HSA) only paid 25% of their healthcare premiums. Employees who opted not to participate, on the other hand, were required to pay 100% of their healthcare premiums.

What’s worse, the EEOC alleges that employees were also slapped with unspecified discipline for not participating in the health testing.

The agency’s lawsuit claims that Flambeau’s program wasn’t truly “voluntary” because of the “dire consequences” it imposed on workers who chose not to participate. Therefore, because the company’s program wasn’t voluntary, the disability-related inquiries and medical exams the program required actually violated the Americans with Disabilities Act (ADA), the EEOC claims.

Remember: The ADA forbids employers from requiring its workers to undergo medical examinations that aren’t directly job-related. However, the law does contain a safe harbor that allows employers to create programs to help in “underwriting risks, classifying risks, or administering such risks” of a bona fide insurance benefit plan.

Flambeau fought the lawsuit by claiming the exams fell under an ADA safe harbor that allows employers to conduct activities related to the administration of a health plan.