11th Circuit Agrees Wellness Incentive Not Discriminatory

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.

The 11th Circuit said if Morrison’s testimony was construed as her legal opinion, it was not enough create a factual dispute precluding summary judgment. If her testimony was construed as addressing an issue of fact regarding the contents of Broward’s plan documents, it presents no substantive argument that the issue of whether the employee wellness program was a written term contained within the physical plan documents for Broward’s group health plan is material to the determination of the safe harbor provision’s applicability.  “The parties do not cite, nor are we independently aware of, any authority suggesting that an employee wellness program must be explicitly identified in a benefit plan’s written documents to qualify as a ‘term’ of the benefit plan within the meaning of the ADA’s safe harbor provision,” the court said in its opinion.  

In 2009, Broward County implemented a wellness program to address rising health care costs and its aging work force, according to court documents. Under the program, employees were required to take a health assessment test and produce a blood sample to determine glucose and cholesterol levels. The following year, the county decided to incentivize its work force by applying a $20 surcharge per paycheck for individuals not participating in the wellness program. The county has since dropped the surcharge.  

Seff, a former Broward employee who incurred the $20 charges on his paychecks from June 2010 until January 1, 2011, filed a class action lawsuit, alleging that the employee wellness program’s biometric screening and online Health Risk Assessment questionnaire violated the ADA’s prohibition on non-voluntary medical examinations and disability-related inquiries.    

The 11th Circuit’s opinion is at http://www.ca11.uscourts.gov/opinions/ops/201112217.pdf.