Appeals Court Ruling: Wellness Program Falls Within ADA Safe Harbor

On Aug. 20, the Eleventh Circuit upheld a ruling by the U.S. District Court for the Southern District of Florida that an employer group health plan’s wellness program did not violate the Americans with Disabilities Act’s (ADA’s) prohibition on nonvoluntary medical examinations and disability-related inquiries because the program falls within the ADA’s safe harbor for bona fide benefit plans. Seff v. Broward County, No. 11-12217 (11th Cir. Aug. 20, 2012).

In this case, defendant Broward County offered a wellness program that consisted of a biometric screening and a confidential health risk assessment questionnaire. The County’s health insurer used the information from the screening and questionnaire to identify employees who had certain diseases to offer them the opportunity to participate in a disease management coaching program and obtain co-pay waivers for certain medications.

The County received aggregated, not individual, data about participants in the wellness program. To encourage participation, the County imposed a $20-per-pay-period surcharge on health plan premiums for those who did not participate in the wellness program. The plaintiff brought suit, arguing that this wellness program violated the ADA’s prohibition on mandatory medical examinations and inquiries and was not voluntary because the program imposed a penalty for nonparticipation.

On April 11, 2011, the district court ruled in the County’s favor on the ground that the wellness program met the ADA’s safe harbor for bona fide benefit plans. In so holding, the district court ruled that (1) the program was part of a bona fide benefit plan and (2) the program was based on underwriting, classifying, or administering risk and was not a subterfuge for discrimination, two qualifications necessary for a plan to fall under the ADA’s safe harbor.

The Eleventh Circuit’s decision to uphold the district court’s ruling is significant because it is a case of first impression that offers an alternate path to analyze whether wellness programs comply with the ADA. The ADA prohibits involuntary medical examinations or disability-related inquiries.

Until now, the challenges to wellness programs—particularly those from the Equal Employment Opportunity Commission (EEOC), which is charged with enforcing the ADA—have focused on whether a program is truly “voluntary” and whether a program poses medical inquiries that violate the ADA. Although the EEOC has waffled over the years in its response to wellness programs, the agency’s current position is that a wellness program complies with the ADA if it is voluntary (i.e., if it neither requires participation nor penalizes employees who do not participate). The decision in this case appears to bypass the EEOC’s “voluntary” analysis by holding that a wellness program that falls within the ADA’s safe harbor for bona fide benefits plans need not comply with the ADA requirements regarding medical examinations and inquiries for employees.