Federal Court Approves Wellness Program's Incentives But Raises Other Uncertainties

September 23, 2016

This week, U.S. District Judge William C. Griesbach ruled an employer's wellness program was voluntary and in compliance with the Americans with Disabilities Act, even though the penalty imposed by the employer for not participating in the program was 100 percent of the cost of self-only coverage.  Although Judge Griesbach ruled standalone wellness programs are not protected by the ADA's safe harbor provision, the decision appears to have left open the issue of whether or not a wellness program that is part of an employer’s health plan and is used to classify or administer risk for the purpose of calculating monthly premiums is covered by the safe harbor.  Notably, the EEOC press release states the agency disagrees with "the court's holding that participation in the wellness plan here was voluntary," and employers should be prepared for the EEOC to continue enforcing its final rule that significantly limits the financial incentives employers can offer to employees to participate in wellness programs.