Wellness Program Survives Class Action Challenge

In Seff v. Broward County, a closely-watched class action case, a U.S. district judge inist2_2906092-medical-notes.jpg Florida recently dismissed a challenge to a “participation only” wellness program under the Americans with Disabilities Act (ADA).  In 2009, Broward County implemented a wellness program, administered confidentially by an outside wellness consultant, in an effort to control rising health care costs.  Under the program, employees enrolled in Broward’s group health plan are asked to fill out a health risk questionnaire and undergo a biometric health screen, which includes a blood draw and blood pressure test.  Employees who decline to participate in the wellness program are assessed a $20 per paycheck surcharge.   

Led by former employee, Bradley Seff, the plaintiffs alleged that the program violated the ADA by requiring employees to undergo medical examinations that were not supported by business necessity.  The Court rejected this claim, holding that the wellness program falls within the ADA’s safe-harbor exemption for bona fide employee benefit plans.  This exemption allows insurance companies to identify risk factors in an employee population and to design benefits to mitigate those risks, provided that the underwriting process is not used as a “subterfuge” to discriminate against the sick or disabled.  In granting Broward County's motion for summary judgment (pdf) and dismissing all claims against it, U.S. District Judge Michael Moore noted that the wellness program constitutes a “term” of a bona fide benefit plan (the Broward County’s insured group health plan) and that the plan administers benefits using accepted principles of risk management designed to lower plan costs.  As such, the Court held the wellness program is not a “subterfuge” for evading the ADA, but rather “is enormously beneficial to all employees of Broward County – disabled and non-disabled alike.”

Because the Court held that the wellness program came within the ADA’s exemption, it did not rule on the question of whether participation in the program was “voluntary,” in accordance with the Equal Employment Opportunity Commission (EEOC) guidelines on permissible wellness programs.  This leaves open the question of what constitutes a “voluntary” wellness program under EEOC standards, particularly when financial incentives or penalties are involved.  Nevertheless, this ruling comes as good news for plan sponsors who currently have or are contemplating wellness programs that include an incentive for participation.  Although the ruling does not directly impact wellness programs that go beyond "participation only" - such as plans that require participants to meet a "health factor" related standard such as remaining tobacco-free, reducing weight or blood pressure, etc. - it does indirectly lend support to such programs. 

Wellness programs that are not part of a “bona fide benefit plan” do not have the safe-harbor exemption available.  Employers who provide mandatory wellness programs outside of a group health insurance plan may therefore wish to review their programs to determine whether they meet the criteria for a “bona fide benefit” plan as defined in the ADA.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.