Not So Sweet: EEOC Targets Company’s Wellness Program

As we discussed more fully in our September 4, 2014 e-lert, the Equal Employment Opportunity Commission (“EEOC”) has set its sights on employers’ wellness programs, which many organizations have set up as a way of encouraging employees to adopt healthier lifestyles and improve productivity, reduce absenteeism due to illness, and control health insurance costs. The EEOC’s latest action against Honeywell International, Inc. (“Honeywell”) is evidence that the EEOC has no plans to wait and see whether the courts will agree with its position in the first round of cases asserting that aspects of such programs are unlawful.

In late October, the EEOC petitioned a federal district court judge in Minnesota to stop Honeywell from applying penalties and costs against employees based on their participation in biometric testing of employees and their spouses as a part of its wellness program. The EEOC contends that if employees or their spouses fail to participate, they will lose Honeywell’s contribution to their health savings account and face up to $2,500 in health insurance surcharges. The EEOC argues that these consequences for non-compliance violate the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act.

In a positive sign for employers, the district judge denied the EEOC’s motion for a preliminary injunction and will not block Honeywell’s administration of biometric testing and assessment of health insurance-related surcharges. The judge has not yet ruled on the legality of Honeywell’s wellness program. However, the judge did opine that Honeywell’s program initially appeared to comply with the Patient Protection and Affordable Care Act’s (ACA) surcharge limits, and she expressed some reservations about the EEOC’s claim that Honeywell’s wellness program violates federal law.

Based on public records, Honeywell’s wellness program has many more safeguards and even-handed components, such as the ACA-compliant incentives/penalties and alternative means of participation in wellness activities, than the programs challenged by the EEOC in previous litigation this fall. Those previous cases allegedly involved wellness programs that imposed heavy financial burdens for non-participation, such as having to pay the full cost of one’s employee health insurance (both employer and employee shares of the premium). Thus, the EEOC’s challenge to Honeywell’s plan is somewhat perplexing, as is the continued absence of guidance from the EEOC on what is permissible in wellness plan design.

Contact your Elarbee Thompson lawyer or reply to this email to obtain additional information as to how this court decision may affect your wellness program.