Flambeau Inc. has asked a federal judge to dismiss the U.S. Equal Employment Opportunity Commission's lawsuit over the company's use of health risk assessments and biometric screenings in its wellness program.
Attorneys for the Baraboo, Wis.-based blow molder and injection molder contend that the company's policy of requiring employees to complete health risk assessments and biometric screenings in order to qualify for coverage under its group health insurance plan did not violate the Americans with Disabilities Act as alleged by the EEOC in its October 2014 lawsuit.
In a motion for summary judgment filed July 15 in U.S. District Court in Madison, Wis., Flambeau's attorneys said the assessment and screening requirements were protected under “safe harbor” provisions of the ADA because they were terms of a bona fide health benefit plan and were based on “underwriting risks, classifying risks or administering such risks.
“Flambeau implemented and then continued the wellness program to mitigate risks and, ultimately, save costs,” the company's attorneys wrote in their motion. “Later, after reviewing insurance claims data reflecting that the majority of the company's benefits costs were generated by a relatively small number of its employees, Flambeau made participation in the wellness program mandatory for participants in the plan, seeking to increase the program's effectiveness in mitigating risks.”
Additionally, Flambeau and its attorneys argued that the assessments and screenings did not violate ADA rules requiring that employee participation in wellness programs be entirely voluntary.
“Employees were entirely free to choose whether to obtain benefits from the company, enroll in health insurance from a different source or forgo insurance altogether,” the company's motion said. “Flambeau never required employees who chose not to participate in the health plan to take part in the assessment and biometric testing process. Indeed, if an employee who was participating in the plan did not want to complete the HRA or biometric testing, he or she could have voluntarily chosen to stop participating in the plan, but continue as an employee of the company.”
As a result, “Flambeau's employees had complete discretion regarding whether they would submit to the HRA and biometric testing process,” the motion said.
In a countermotion for summary judgment against Flambeau on the matter of its liability under the ADA, the EEOC argued that requiring employees to complete wellness screenings or activities in order to qualify for health care coverage does not constitute a voluntary program.
“In common understanding, mandatory is the opposite of voluntary, and no employer can in good faith claim its tests and inquiries are both at the same time,” the EEOC argued in its motion. “If additional proof on this point were needed, the dictionary definition of 'mandatory' in this context is 'containing or constituting a command.'”
Earlier this year, the EEOC issued a set of long-awaited proposed rules on the interaction of employer-sponsored wellness programs and the ADA. Among those proposed rules is a provision that would specifically prohibit employers from denying health care coverage to employees that do not participate in health risk assessments, biometric screenings or other wellness-related activities.
But Flambeau attorneys argued in their motion that the rules have not yet been finalized and are therefore not applicable to the agency's lawsuit against the company.
“In all likelihood, the EEOC will argue that whether a medical exam is 'voluntary' for purposes of the ADA is determined not with respect to whether an employee could remain employed if he or she declined to participate, but whether he or she could still participate in the employer's group health plan if he or she declined to participate in the medical exam,” Flambeau's attorneys said. “However, there is little to no support for this position in case law or the statutory language of the ADA.”
Flambeau ceased using the wellness tests, which it had used in the 2012 and 2013 plan years, as an eligibility requirement for its health plan in January 2014.
“It's a good test case for the baseline issue here, which is how should employers interpret the safe harbor provisions of the ADA,” said James Napoli, a Washington-based partner at Seyfarth Shaw L.L.P. “I think perhaps the reason the EEOC took this case in the first place is that (Flambeau's) approach to its wellness program is pretty much as aggressive as you can be within the safe harbor.”
Experts say the EEOC's motion for summary judgment against Flambeau is a strong indication that the agency intends to continue actively enforcing rules under the ADA and other federal laws governing employers' use of employee wellness programs and incentives, including new rules proposed earlier this year that would specifically prohibit employers from denying health care coverage to employees that do not participate in health risk assessments, biometric screenings or other wellness-related activities.
“I think the big picture here is that the EEOC basically wants to interpret the ADA in such a narrow way that it would essentially write out the safe harbor provisions for bona fide health plans,” said Frank C. Morris Jr., head of Epstein Becker & Green P.C.'s labor and employment practice in Washington.
Katy Spangler, senior vice president of health policy at the Washington-based American Benefits Council, said it was troubling to see the EEOC continue to pursue litigation against an employer for allegedly violating rules that had not been proposed at the time the lawsuit against Flambeau was filed and still have not been finalized.
“The idea that they would continue to pursue action against employers as if the rules have been finalized doesn't seem like a fair way to go,” Ms. Spangler said. “Our employer members take their compliance obligations very seriously. They were blindsided when the EEOC started pursuing litigation without having put a marker down as to what they viewed to be voluntary or not.”