EEOC v. Flambeau Case Update

Just over a year after the US District Court in the Western District of Wisconsin decided in favor of wellness programs that require employees to pay 100% of their health insurance premium if they refuse to participate in an HRA or biometric screen, the US Court of Appeals for the Seventh Circuit in Chicago let that decision stand. Recall that the EEOC appealed the district court’s decision to the Seventh Circuit and that during oral argument before the panel of appellate judges, the judges inquired as to whether the employee suffered any injury in the case.

On January 25, 2017, the Seventh Circuit issued its opinion in the case and not surprisingly, based on the judges’ comments at oral argument, decided that there was no injury to the employee and therefore the case is moot. The Flambeau employee who brought the original complaint against his employer for requiring him to take the HRA and biometric screen had resigned his position in March 2014, six months after the EEOC filed its lawsuit against Flambeau. The court concluded that, given the circumstances, the employee was not entitled to any monetary damages and the legal and factual landscape has changed since 2012 (when Flambeau’s wellness program required employees to take HRAs and biometric screens).

Now, we have the EEOC regulations issued in May 2016 and Flambeau no longer requires HRAs and biometric screens as part of its wellness program. Indeed, the Seventh Circuit noted that Flambeau halted the mandatory HRAs and biometric screens in part because it found that its employees were not using the test results to change their behavior. Opinion, at 12.

Because the Seventh Circuit found the case moot, it did not address the legal question of whether the ADA insurance safe harbor can apply to workplace wellness programs. Applying the insurance safe harbor would allow wellness programs to “require” employees who were part of an employer’s health plan to take HRAs and biometric screens or face paying the full health insurance premium.

The Seventh Circuit’s decision to not weigh in on that legal question means that the District Court’s analysis of the insurance safe harbor within the ADA still stands. Which, as I mentioned in a previous blog post, was the opposite conclusion reached by the Orion Energy court last fall. Which means that using the ADA insurance safe harbor for workplace wellness programs is risky and in violation of the EEOC ADA rules. So until you hear differently, don’t rely on the ADA insurance safe harbor for your wellness program.