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Employer wellness programs are generally designed to incentivize employees to adopt a healthier lifestyle in exchange for financial rewards. Participation requirements vary widely from program to program, but employees who participate are often subject to medical examinations and disability-related inquiries that may otherwise be impermissible under the Americans with Disabilities Act (ADA). Those examinations and inquiries are allowed under the ADA, however, if participation in the program is "voluntary."

In the waning months of 2014, the EEOC took aim at three employer wellness programs run by Honeywell International, Inc., Orion Energy Systems, Inc. and Flambeau, Inc., alleging that the programs lacked the crucial "voluntary" element. Each program required employees to submit to certain medical examinations—such as biometric testing or a blood draw—and to answer health-related questions. According to the EEOC complaints, employees who refused or failed to participate incurred a range of "severe consequences," such as canceled medical insurance, a directive to pay their full insurance premiums, discipline or termination. The agency determined that such penalties rendered the programs involuntary and, therefore, impermissible under the ADA. In the Honeywell action, the EEOC further claimed that the company violated the Genetic Information Nondiscrimination Act by penalizing an employee when his wife refused to participate in the medical examinations, which could have revealed certain family medical history information.

The EEOC's position on wellness programs is troubling for a number of reasons. First, while the agency has expressed interest in issuing regulations that will clarify the criteria for establishing a "voluntary" wellness program, no such regulations have been issued. Second, certain Health Insurance Portability and Accountability Act (HIPAA) and Affordable Care Act (ACA) statutory provisions, rules and regulations allow for incentive-based wellness programs and permit, in specific circumstances, penalties for nonparticipation. The EEOC's stance in the three cited suits seemingly runs contrary to this other Federal legal authority.

These cases are all in their early stages, and there is no way to know whether the courts will agree with the EEOC's litigation position. In any event, employers are cautioned to carefully review and consider the terms of their wellness programs prior to implementation and to evaluate whether modifications are appropriate in light of the recent EEOC actions noted above. If you have any questions on this topic, please contact Philip L. Mowery at +1 (312) 609 7642, Elizabeth N. Hall at +1 (312) 609 7795, Cheryl A. Luce at +1 (312) 609 7872 or any Vedder Price attorney with whom you have worked.

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Philip L. Mowery


Elizabeth N. Hall