11th Circuit Rules for Employer in Americans with Disabilities Act Challenge to Wellness Plan

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[authors: Nancy C. Brower, Kelsey N. H. Mayo]

The 11th Circuit’s decision in the employee class action suit of Seff v. Broward County provides some comfort to employers who incentivize employees to participate in common wellness plan tools, such as biometric screening or health risk assessments (whether through financial penalties or rewards).  In Broward County, the 11th Circuit ruled that if the ADA insurance safe harbor applies to a wellness plan, then the wellness plan need not meet the “voluntary” standard otherwise applicable to post-employment medical exams and post-employment disability-related inquiries. The ADA’s insurance safe harbor provides that the ADA shall not be construed to prohibit or restrict an employer from establishing, sponsoring or administering the terms of a bona fide benefit plan that are based on underwriting risks, classifying risks, or administering risks, provided that this provision is not used as a subterfuge to evade the purpose of the ADA.

The 11th Circuit agreed with the District Court that the wellness plan activities at issue, health risk assessment and barometric screening, did involve classifying risks and administering risks.  The employee argued that the wellness plan was not part of Broward County’s group health plan, and thus, could not be covered by the ADA insurance safe harbor.  The 11th Circuit ruled that the Broward County wellness plan could be considered a “term” of Broward County’s group health insurance plan for purposes of the ADA safe harbor since the wellness program was part of the contract with the insurance company running the plan, the wellness plan was only available to group health plan enrollees, and Broward County had presented the program as part of its group health plan in at least two employee handouts.

It is encouraging that the one circuit to have considered this ADA issue ruled in favor of the employer.  However, it remains to be seen whether other circuits and the EEOC will agree with the Broward County decision.  In the meantime, employers with wellness plans that contain similar provisions should consult with counsel regarding whether any design and documentation changes are advisable given this ADA insurance safe harbor decision.

 

Published In: Administrative Agency Updates, Civil Rights Updates, Health Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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