Employee Wellness Program—Potential Risks Under ADA?

You implement a voluntary employee wellness program which requires employees to undergo health risk assessments and complete a health history questionnaire.  One of the incentives is that employees who complete the health risk assessment are not required to pay their monthly premiums for single coverage health insurance.  An employee raises concerns about the confidentiality of her health information if she participates and the voluntariness of the program and ultimately decides not to. If that employee ends up being fired, could she make a claim under the ADA?

After facing a lawsuit brought by the EEOC making similar allegations, an employer in Wisconsin recently entered into a consent decree, agreeing to pay $100,000 and take a number of other corrective actions to avoid any future potential discrimination based on disability.  EEOC v. Orion Energy Systems, Inc., No. 1:14cv1019.

Orion implemented a new employee wellness program in 2009.  In order to participate in the wellness program and thus receive the benefits from Orion (which included payment for health insurance premiums), employees had to complete a health risk assessment.  According to the complaint filed by the EEOC, the wellness program included disability-related inquiries and medical examinations within the meaning of the ADA which were not job-related and consistent with business necessity.   One employee, Wendy Schobert, did not want to participate in the wellness program based on questions about whether the health risk assessment was truly voluntary and whether the medical information received in connection with the assessment would be kept confidential.  The EEOC claimed that after she raised her objections to participation in the plan, she was told by Orion not to express any opinions about the wellness program to her co-workers.   Because Schobert decided not to participate in the wellness program, she had to pay her own premium costs and was also charged a penalty per month for declining to participate in the fitness component of the program.  A few months later, Orion terminated Schobert.  The EEOC claimed that it was because she objected to the wellness program.

The EEOC filed a lawsuit against Orion, asserting that the medical examinations and inquiries that were part of the wellness program were not actually voluntary since she was penalized and ultimately fired for not participating and thus that by engaging in these practices, Orion had violated the ADA.  The EEOC also claimed that Orion retaliated against Schobert because of her objections to the wellness program and interfered with, coerced and intimidated Schobert based on her exercise of her rights under the ADA.

Orion disputed that Schobert’s termination related to her decision not to participate in the wellness and was entirely based on other issues, including some critical emails she had sent to the company’s CEO regarding certain expenses.  Orion also raised other defenses, including that the wellness program was voluntary because the employees had a choice as to whether to participate.

Last week, Orion entered into a consent decree. Some of the components were an injunction prohibiting Orion from maintaining any wellness program that is not voluntary in violation of the ADA, a commitment to posting certain information regarding the ADA, and agreement to provide training and oversight regarding the ADA and wellness programs, an obligation to report to the EEOC regarding the use of any future wellness programs, and an agreement to pay Schobert $100,000 for pecuniary losses, back pay and attorneys’ fees.

Because they are so interwoven with employees’ medical condition and information, wellness programs can certainly be tricky to properly implement.  Employers need to be aware of the potential risks associated with utilizing these types of programs and take extra caution at the time of both creation and implementation to insure that they are maintaining compliance with the ADA.