Amicus brief filed concerning regulation of wellness programs

Four employer organizations—the ERISA Industry Committee (ERIC), the Chamber of Commerce, the American Benefits Council, and the HR Policy Association—have jointly filed an amicus brief with the Seventh Circuit U.S. Court of Appeals regarding Equal Employment Opportunity Commission (EEOC) v. Flambeau, Inc. (DC WI, No. 14-cv-638-bbc). The amicus brief argues that the EEOC does not have regulatory authority over wellness programs.

In the case, the federal district court in Wisconsin found that an employer’s requirement that employees who wanted to participate in its health insurance plan first complete a wellness program (including a health risk assessment and biometric test) did not violate the Americans with Disabilities Act’s (ADA’s) prohibition against medical exams because the requirement was a term of the plan, was used to enable the employer to underwrite, classify, and administer its health insurance risks, and was not used as a subterfuge to evade the purposes of the ADA. The amicus brief emphasizes that this lower court opinion should be affirmed.

“Wellness programs are a critical part of many large employer health plans,” said Annette Guarisco Fildes, president and CEO of ERIC. “Wellness plans help to make health insurance more affordable and provide employers with valuable information that allows them to anticipate future health care costs, which can then be taken into consideration when designing and pricing future health care plans.”

ERIC asserts that the EEOC’s attempt to exercise regulatory authority over wellness plans is not authorized by the ADA and wellness program participants are already protected against discrimination under current law. The ADA exempts insurance from some of the ADA’s duplicative requirements, and wellness programs function as insurance under the ADA.

Wellness programs are beneficial to both employers and employees, and the EEOC’s attempts to diminish and discourage wellness programs are contrary to statute. “ERIC strongly urges the Circuit Court to uphold the District Court’s ruling and find in favor of Flambeau, Inc.,” said Guarisco Fildes.

EEOC stance. In a recent final rule (81 FR 31126, May 17, 2016), the EEOC specifically noted its disagreement with the court decision, because it applied the safe harbor provision “far more expansively to support employers’ imposition of penalties on employees who do not answer disability-related questions or undergo medical examinations in connection with wellness programs.”

The EEOC believes that in the case, the employer did not use wellness programs in a manner consistent with the application of the safe harbor provision. In Flambeau, the employer or its health plan did not “use wellness program data to determine insurability or to calculate insurance rates based on risks associated with certain conditions—the practices the safe harbor provision was intended to permit,” wrote the EEOC. “Moreover, there is no evidence in Flambeau that the decision to impose a surcharge or to exclude an employee from coverage under a health plan was based on actual risks that non-participating employees posed.”

SOURCE: ERIC press release, June 6, 2016.

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