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EEOC Sues Employer for Allegedly Coercing Employee to Participate in Wellness Program

    Client Alerts
  • September 12, 2014
Employers continue to struggle to understand the Equal Employment Opportunity Commission’s position with regard to their wellness programs. While conceding the lawful use of such programs and the benefits achieved in terms of controlling health care expenses, the EEOC has repeatedly expressed doubts over the legality of many common wellness plan features under the Americans with Disabilities Act. Last month, the EEOC filed suit against a Wisconsin employer it alleges assessed inappropriate penalties against an employee who declined participation in the wellness program.

Orion Energy’s wellness program contained a very standard requirement that employees participate in a health risk assessment, including submittal of a blood sample for analysis. According to the EEOC, employees who declined to participate in the analysis are required to bear the entire cost of their health insurance premiums, and pay an additional $50 per month penalty for non-participation, for a difference of up to $500 per month compared to employees who chose to participate. The EEOC also alleged that the company fired an employee who not only refused participation in the program, but voiced her objections to her coworkers.

In previous guidance, the EEOC stated that voluntary participation in wellness programs is permissible under the ADA. However, employers cannot penalize employees who refuse to participate. According to the agency, penalizing employees means imposing significant costs such as shifting large portions of health care expenses to the employees, or depriving them of significant incentives provided to employees who do participate. The EEOC has never drawn the line between allowable participation incentives and impermissible penalties. The agency is supposedly working on new regulations to better define the interplay between wellness programs and the ADA. Even without such rules in place, the EEOC apparently believes that the alleged Orion Energy program was egregious enough to merit litigation.