Facts of the CaseIn 2009, Broward County instituted a “wellness program” to improve the overall health of its workforce and lower rapidly escalating healthcare costs. The wellness program was administered by the County’s health insurer and had two components: (1) a confidential Health Risk Assessment questionnaire, and (2) a confidential biometric screening that involved a finger stick blood test to measure glucose and cholesterol levels. Under the program, the County’s insurer would use the information from the questionnaire and screening to identify employees who had asthma, hypertension, diabetes, congestive heart failure, or kidney disease. Employees identified by the insurer as having one of these conditions would then be given the opportunity to participate in a disease management coaching program and become eligible to receive co-pay waivers for certain medications associated with the identified disease. Employee participation in the wellness program was not required for health coverage, but in 2010 Broward County began deducting $20.00 from the bi-weekly paychecks of employees who refused to participate in the questionnaire and screening. On August 8, 2010, Bradley Seff, a former County employee who incurred the $20.00 surcharges on his paychecks, filed suit against the County. Seff alleged that the County’s wellness program violated the Americans with Disabilities Act’s (“ADA”) prohibition against medical examinations and inquiries into the nature or severity of an employee’s disability that are not job-related. In December of 2010, after other County employees joined Seff, the District Court certified the suit as a class action. The District Court ruled in favor of Broward County, holding that the wellness program fell under an insurance safe-harbor provision of ADA. In drafting the ADA, Congress recognized that legitimate insurance policy terms often have adverse effects on people with disabilities, and permitted such terms under the safe harbor provisions so long as they are not used to evade the anti-discriminatory purpose of the ADA. The court held that the wellness program met the two requirements of this safe harbor provision: (1) that the program was a term of the County’s group health plan, and (2) that the program was based on the accepted principles of risk assessment and was not a pretext for discrimination. The plaintiffs then appealed to the Eleventh Circuit Court of Appeals.
Issue of the Case
- Whether the Broward County wellness program falls under an ADA insurance safe-harbor provision?
Arguments & Analysis
1. Prohibited Examinations and Inquiries and the “Safe Harbor Provision”Under the ADA, an employer cannot require that an employee take a medical examination or ask questions about an employee’s disability unless they are related to the employee’s job and necessary for the conduct of the employer’s business. The ADA, however, permits these practices if they are contained in the terms of a bona fide benefits plan and are not used to evade the anti-discriminatory purposes of the ADA. This rule, often called the ADA “safe harbor provision,” acknowledges that the terms of benefits plans often make disability-based distinctions that are based on sound actuarial principles or related to actual or reasonably anticipated experience. According to the Equal Employment Opportunity Commission (EEOC), the federal agency authorized to enforce Title I of the ADA, a plan must exist and pay benefits in order to be bona fide. Furthermore, the terms of the plan must have been accurately communicated to eligible employees. A term of the bona fide benefits plan evades the purpose of the ADA if it makes disability-based distinctions that are not based on sound actuarial principles or related to actual or reasonably anticipated experience. For example, actuarial data that is outdated or that is based on myths, fears, stereotypes, or assumptions about the disability at issue would not qualify under the safe harbor provision. The plaintiffs argued that Broward County’s wellness program did not fall under the safe harbor provision because it was not a term of the County’s benefits plan. Their argument relied on the statements of the County’s acting benefits manager who testified that the wellness program was not a written term in the County’s benefit plan. The Eleventh Circuit rejected the plaintiffs’ argument for two reasons. First, the Court held that the County’s acting benefits manager was merely expressing her legal opinion that the wellness program was not a term of the County’s benefits plan within the meaning of the ADA’s safe harbor provision. The Court found that her legal opinion alone would not create a factual dispute as to whether the wellness program was considered a term. Second, while the County’s benefits manager may have been correct that the County’s group health plan did not contain a written term providing for the wellness program, the Court held that there is no case law to suggest 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.” Although the program was not written in the plan, the Court found sufficient evidence to suggest it was an actual term of the plan, namely that the County’s insurer sponsored the wellness program as part of its contract with the County, the program was only available to group plan enrollees, and the County presented the program as part of its group plan in at least two employee handouts.
RulingThe Eleventh Circuit held that the Broward County wellness program was a “term” of the County’s health insurance plan and affirmed the District Court’s ruling that the wellness program fell within the ADA’s safe harbor provision.
Policy & Practice
1. What is a “term” of a benefits plan?The holding of Seff v. Broward County, Fla. strongly suggests that a wellness program does not have to be physically written into a benefits plan in order to constitute a term of the plan. A court can use other evidence such as whether the program is included in the contract with the employer, whether participation in the program is available to all group plan enrollees, and whether the employer presented the program as a part of its benefits plan in employee handouts.
2. Was Enrollment in the County’s Wellness Program Involuntary or Job-Related?As mentioned above, the ADA prohibits involuntary medical examinations that are neither related to the employee’s job nor necessary to the conduct of the employer’s business. Both the District Court and the Eleventh Circuit declined to address the questions of whether the twenty-dollar surcharge meant that participation in the wellness program was involuntary and whether the examinations were related to the employee’s job. The Equal Employment Opportunity Commission (EEOC), the federal agency authorized to enforce the employment portion of the ADA, has yet to promulgate regulations on this subject. It has however issued guidance suggesting that such programs are both involuntary and unrelated to the employee’s job. In an August 10, 2009 advisory letter titled “ADA: Health Risk Assessments,” the EEOC wrote that “disability-related inquiries and medical examinations are permitted as part of a voluntary wellness program,” but that a wellness program is only voluntary “if employees are neither required to participate nor penalized for non-participation.” The EEOC added that “requiring employees to complete a health risk assessment that includes many disability-related inquiries…does not appear to be job-related.”
- Eleventh Circuit: Seff v. Broward County, Fla. [PDF] www.ca11.uscourts.gov/opinions/ops/201112217.pdf
- ADA Safe Harbor Provision: 42 U.S.C. § 12201(c)(2)
- ADA: Health Risk Assessments (EEOC Letter – August 19, 2009) www.eeoc.gov/eeoc/foia/letters/2009/ada_health_risk_assessment.html