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EEOC Sues Wellness Plans Compliant with the ACA

By January 2, 2015February 21st, 2020Archived Blogs, Personal Insurance


Many business leaders initially supported the health care reform largely because of its wellness plan initiatives. The Affordable Care Act allows corporations to incent and reward employees who participate in corporate wellness programs meant to encourage employee health and wellness. Over time, workplace wellness programs are projected to reduce a company’s group medical insurance premiums by incentivizing employees to get healthy. Corporate wellness programs may be participatory only, or health contingent (outcome based), and focus on health-related issues such as early detection, weight loss, and smoking cessation.

Corporation-sponsored wellness programs have been met with resistance from some employees and from the Equal Employment Opportunity Commission, who claim that some wellness programs are discriminatory. However, the ACA has nondiscriminatory standards built into the legislation, such as the size of the reward, and the availability of reasonable alternatives for people who are medically incapable of participating. Despite the nondiscriminatory standards, recently employees of Honeywell and several other smaller companies filed lawsuits with the Equal Employment Opportunity Commission, arguing that their company’s wellness programs violate the American with Disabilities Act, and therefore are discriminatory. In the Honeywell case, Honeywell asked employees to complete biometric screenings and rewarded employees who complied with the screenings with a $4,000 incentive. The lawsuit claims that the large reward obliterates the voluntariness of the program, and discriminates against unhealthy employees by requiring employees to complete the biometric tests that reveal health conditions. It is now clear that companies can no longer rely on compliance with the ACA’s nondiscrimination standards to avoid wellness program liability.

Companies are shocked that wellness plans that comply with the ACA are now the target of lawsuits filed by the administration’s EEOC. Although business leaders criticize Obama for the EEOC’s ability to sue companies for ACA-compliant wellness programs, it is debatable whether Obama has the power to interfere with the commission’s efforts. In the meantime, it is unclear whether business leaders will continue to embrace the ACA’s wellness efforts.

The EEOC has indicated for quite some time that it is working on releasing regulations that will help companies to implement wellness programs without fear of liability. JKJ’s Wellness and Corporate Compliance departments will continue to monitor further developments, including the release of EEOC regulations concerning company-sponsored wellness programs.

Author: Melissa Remmey

JKJ Intern

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