The federal government has encouraged employers to implement incentive-based wellness programs as one way to cut into ever-growing health care costs. These programs provide financial incentives for employees who participate and, in some cases, achieve certain healthy criteria, such as maintaining a healthy BMI and cholesterol level.
Employers who have taken this route have found themselves mired in a murky confluence of labor, employment, health care and privacy laws. The plans must comply with HIPAA, the PPACA, the ADA, the ADEA, Title VII, GINA and possibly the NLRA if the workforce is unionized. Depending on how they are interpreted, the requirements to comply are in some cases conflicting and in other places unclear.
Enter the United States District Court for the Southern District of Florida. In a much anticipated decision for those following wellness programs, Judge K. Michael Moore granted summary judgment in favor of Broward County’s wellness program. A copy of the opinion in Seff v. Broward County is attached. Seff filed a class action suit under the ADA challenging the legality of the wellness program, contending that the program violated the ADA’s medical inquiry requirements because the program was not voluntary. Seff argued that the program was not voluntary because non-participants incurred a $20 charge, which he characterized as a penalty.
The Court, although avoiding interpreting the ADA head on, held that the wellness program fell under the ADA’s insurance safe harbor provision, 42 U.S.C. 12201(c).
Employers who wish to take advantage of this good development should note:
1. The wellness program must be a term of a bona fide benefit plan;
2. Aggregate date obtained from the plan should used to analyze and develop future benefit plans; and
3. The plan must be consistent with applicable state law.
Of course, employers should be mindful that this decision is likely to be appealed and that different courts may reach different conclusions. Nonethelss, it is a positive step for the legality of incentive-based wellness programs.