Court decision encourages employers to closely tie wellness programs to group health plans
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In Seff v. Broward County, Fla., No. 11-12217 (11th Cir.), a federal appeals court upheld the employer’s (Broward County, Florida) wellness plan despite the imposition of a financial penalty for nonparticipants, and rejected an Americans with Disabilities Act (ADA) challenge. The employer’s motion was granted, ruling that the ADA’s safe harbor provision for insurance plans exempted the wellness program from any ADA prohibitions.
On appeal, the 11th U.S. Circuit Court of Appeals affirmed and noted that the safe harbor provision states that the ADA does not prohibit an employer “from establishing, sponsoring, observing or administering the terms of a bona fide benefit plan that are based on underwriting risks, classifying risks or administering such risks that are based on or not inconsistent with state law.”
It also noted that the wellness program was part of the employer’s carrier contract to provide the employer with a group health plan, and that the program was available only to group plan enrollees and that the employer presented the program as part of its group plan in at least two employee handouts.
Until now, the challenges to wellness programs have focused on whether a program is truly ‘voluntary’ and whether a program poses medical inquiries that violate the ADA. The Equal Employee Opportunity Commission’s current position is that a wellness program complies with the ADA if it neither requires participation nor penalizes employees who do not participate. On the surface, this recent court decision 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.
Regardless of the EEOC’s stance, the decision does encourage employers to closely tie their wellness programs to their group health plans and explicitly identify wellness programs in their benefit plan’s written documents. Additionally, the ruling seems to imply that consistent distribution and communication of plan documentation with employees is important.
DISCLAIMER: Because of the generality of this update, and based on particular situations, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice, financial advice and/or the advice of a licensed insurance or certified human resource professional.
© Connelly, Carlisle, Fields & Nichols 2012