31 Oct Ruling May Give Wellness Programs a Boost

A recent federal ruling likely will ease some compliance worries for employers sponsoring wellness and disease management programs.

The 11th Circuit Court of Appeals recently upheld a lower-court ruling that a wellness program in Florida does not violate the Americans with Disabilities Act’s (ADA) prohibition of required health exams and disability-related questions because the program falls under a safe harbor for “bona fide” benefit plans — that is, the plan’s terms are based on “underwriting risks, classifying risks, or administering risks” and not “a subterfuge” to evade ADA requirements, according to a report in Human Resource Executive Online.

For employers, the ruling means that at least in some circumstances, an employer can offer a “nonvoluntary” wellness program without running afoul of ADA.

“The court said that if you have your wellness program as part of your standard health plan, you can fit this under a new exception that does not violate the ADA and doesn’t require voluntariness,” Brian Pinheiro of the law firm Ballard Spahr said in HREO.

Teresa Jakubowski, partner with Barnes and Thornburg, added that the ruling will give employers more flexibility when using “penalty-based” wellness strategies.  “There are the carrot and the stick approaches, and the court approved the stick in this case,” Jakubowski told HREO.

Employers, however, should still take caution with their wellness compliance as it relates to ADA, warned Nina G. Stillman and Andy R. Anderson of Morgan Lewis in a recent article for Employee Benefit News.

While the ruling likely will give employers some breathing room, it is unclear how the Equal Opportunity Employment Commission (EEOC) — which is responsible for enforcing ADA — will interpret this ruling, the Morgan Lewis attorneys noted.

In the meantime, employers would be best served to keep their wellness initiatives voluntary by “focusing on providing positive incentives for participation rather than negative consequences for nonparticipation,” Stillman and Anderson wrote.

Employers also should remain aware of wellness-related regulations that still apply outside of the ADA, including the privacy and nondiscrimination rules in HIPAA, the Genetic Information Nondiscrimination Act and the health care reform law, Stillman and Anderson noted.

Despite the compliance hurdles, employers continue to turn to wellness as a way to reduce their overall health care costs and help their workforce remain productive and healthy, according to a new survey by Humana and the National Small Business Administration. The survey, as reported by LifeHealthPro, found that three of four small businesses that offer wellness initiatives say the programs “positively impact their bottom line.”