Compliance

11th Circuit Agrees Wellness Incentive Not Discriminatory

By Rebecca Moore editors@plansponsor.com | August 29, 2012
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August 29, 2012 (PLANSPONSOR.com) - A federal court has agreed that a Florida county’s wellness program did not violate the Americans with Disabilities Act (ADA).

The 11th U.S. Circuit Court of Appeals agreed with a district court’s grant of summary judgment to Broward County, finding that the ADA’s safe harbor provision for insurance plans exempted the employee wellness program from any potentially relevant ADA prohibitions (see “Court Finds Wellness Program Incentives Not Illegal”).   

The appellate court pointed out that under the ADA, a “covered entity” is prohibited from “requir[ing] a medical examination” and “mak[ing] inquiries of an employee as to whether such employee is an individual with a disability or as to the nature or severity of the disability, unless such examination or inquiry is shown to be job-related and consistent with business necessity.” However, the legislation contains a safe harbor provision that exempts certain insurance plans from the ADA’s general prohibitions. This includes the prohibition on “required” medical examinations and disability-related inquiries, which states that the ADA “shall not be construed” as prohibiting a covered entity “from establishing, sponsoring, observing or administering the terms of a bona fide benefit plan that are based on underwriting risks, classifying risks, or administering such risks that are based on or not inconsistent with state law.”  

On appeal, Bradley Seff argued that the district court ignored testimony of Lisa Morrison, Broward’s corporate representative and acting benefits manager, who testified that the employee wellness program was not a term of Broward’s benefit plan and that the employee wellness program was not a term contained in Broward’s health and pharmacy plans.