GDP Blog

Wellness Gone Wrong

Posted by John Powter

Oct 4, 2014 1:33:25 PM

In order to avoid costly litigation, employers need to carefully design their wellness program — especially when they reward participants with incentives and discounts on their medical coverage. The EEOC recently sued a Wisconsin employer, claiming the penalty the employer imposed for non-participation in its program was too significant. The EEOC also determined the wellness requirements were involuntary under the Americans with Disabilities Act,”Employee Benefit Adviser reports.

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“Employers and their advisers should pay careful attention to how the EEOC defines liability in this case, EEOC v. Orion Energy Systems. It is a reminder to stay in compliance with the Affordable Care Act’s rules for wellness as well.”

“In the EEOC case, the employer paid 100% of the health insurance premiums for employees who participated in its ‘voluntary’ wellness program. If the employee chose not to participate, the employee paid 100% of the premiums. The program contained two components. First, employees completed a health risk assessment, and second, a ‘fitness’ component involved completing a medical history questionnaire and exercising on the employer’s range of motion machines. The complaint also alleges that there was a $50 ‘penalty’ for not participating in the fitness component of the wellness program.”

Key to avoid problems: “For outcomes-based wellness programs that reward employees for meeting certain goals, such as lowering their body mass index or cholesterol, or quitting smoking, a reasonable alternative standard must also be provided for those who don’t meet the outcomes-based standard. This ensures that the wellness program is reasonably designed to improve health and is not a ruse for underwriting or reducing benefits based on health status.”

Topics: Employee Benefits

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