EEOC Brings First ADA Lawsuit Challenging Employer’s Wellness Plan

The Equal Employment Opportunity Commission (EEOC) filed its first lawsuit on August 20, 2014, alleging an employer’s wellness plan violates the Americans with Disabilities Act (ADA). EEOC v. Orion Energy Systems (E.D. Wis. 2014). The ADA prohibits employers from requiring current employees to submit to medical examinations and making medical inquiries not based on business necessity. Wellness programs are an exception, but only if participation is voluntary. The EEOC claims that Orion’s program was not voluntary because of the cost to employees for opting out.

Orion implemented a wellness program in 2009. The program included a health-risk assessment, blood work, and a fitness component. Employee Wendy Schobert objected to the program. She questioned whether the health-risk assessment was voluntary and expressed concern over whether Orion would keep medical information confidential. Schobert alleges that Orion management warned her to stop voicing her objections to the program.

Schobert was the only employee who chose to opt out of the program. As a result, she was required to pay the full cost of her health insurance premium—more than $400 per month—plus a $50 monthly fee for opting out of the program. Orion terminated Schobert’s employment shortly thereafter.

The EEOC is suing on Schobert’s behalf claiming that Orion’s program was not voluntary because opting out required Schobert to pay the full cost of her health insurance premium and a monthly penalty. Therefore, the program violated the ADA’s prohibition against impermissible medical examinations and inquiries. The EEOC is also bringing a separate claim alleging that Orion retaliated against Schobert by terminating her employment for voicing concerns about the wellness program.

Employers should review their wellness programs to ensure they do not involve such extreme costs and penalties for employees who decline to participate.