Financial incentives in wellness programs don't violate ADA, court rules

It has been ruled that a company that requires employees to participate in a wellness plan or face a $20 surcharge on insurance premiums is not in violation of the Americans with Disabilities Act.

In 2009, Broward County, Florida implemented a wellness program for its employees. The program required participants to take a health assessment test and produce a blood sample to determine glucose and cholesterol levels. Those who didn't participate had a $20 surcharge on health plan premiums.

Broward County employee Bradley Seff filed a class-action complaint, alleging that the county's wellness incentives violated the ADA. The U.S. District Court for the Southern District of Florida dismissed the lawsuit, saying, "The wellness program is not a subterfuge; it was not designed to evade the purpose of the ADA. Rather, it is a valid term of a benefits plan that falls within the ambit of the ADA's safe harbor provision."

The court noted that the two requirements of the safe harbor provision were met in this case:

(1) that the party in question be a bona fide benefit plan

(2) that the provision in question be based on underwriting, classifying, or administering risk and not be used as a subterfuge for discrimination.

The EEOC has suggested informally that a wellness program that is mandatory or involves a penalty may violate the ADA, although it has not issued any formal guidance. In any event, the Broward County case is not necessarily persuasive in other jurisdictions, so health plans should continue to watch for any action by the EEOC in this area.