On December 31, 2015, Judge Barbara Crabb of the US District Court for the Western District of Wisconsin ruled against the Equal Employment Opportunity Commission (EEOC) and held that an employer is permitted to require workers to undergo health screenings as a condition for receiving employer-provided health insurance coverage. In what appears to be a landmark ruling for some, Judge Crabb wrote that an employer’s requirement for health risk assessment (HRA) and for biometric screening in order to qualify for health insurance coverage falls within the safe harbor of the Americans with Disabilities Act (ADA).
What many interpret this to mean is that an employer may now require employees to complete HRA’s as well as go through biometric screenings at health fairs that qualify for the employer to pay for the majority of the insurance premium. In the case of EEOC v. Flambeau Inc., the employer could require non-compliant employees to pay for the entire cost of the health insurance premium.
While many have seen this ruling as a green light for employers to implement such requirements, much caution should be taken before proceeding for the following reasons.
First, while one judge in Wisconsin has given her ruling on the matter, it is likely to be challenged again by the EEOC. The EEOC feels very strongly about its stance and isn’t going to call it quits. Other judges may or may not rule in the same manner and the matter could end up going to a higher court. The EEOC has yet to release its proposed regulations on wellness program incentives and unlawful discrimination. Their final ruling is expected later this year.
Second, there is an insurance carrier requirement that employers fund at least 51% of the premium for the employee only. Failing to do so results in the health plan being a voluntary plan and if there is a considerable amount of employees who end up having to pay for the entire premium, this could increase premiums or cause other difficulties with the carrier.
Third, there are ACA requirements that employers provide coverage that is affordable (no more than 9.5% of the employees annual income), meets the minimum levels of coverage, and offers coverage to 95% of their eligible workforce. If an employee declines to participate in the screening or HRA, has the employer met the ACA requirements?
When one approaches a stop light, the three colors are red, yellow, or green. Red clearly means “stop” and green clearly means “go.” But in our busy world, yellow can take on different meanings. One camp believes that yellow means “speed up” while another interprets it to mean “slow down.” When considering these three challenges alone, our stance is to “slow down.” The proposed regulations alone will result in clarification and what the next steps could be.
What employers should be looking at is what other means there are to changing behavior. Biometric screenings and health risk assessments should not be the sole pieces of a comprehensive health management program. How a company incorporates health management into their operating processes and compensation system are potentially much more effective. Using the psychology of the proverbial “carrot” versus the “stick” also contributes to positivity in the workplace, a value that could reap far greater rewards than getting employees to answer a bunch of questions that may or may not be relevant to them.
Regardless of how you would like to interpret the ruling, we encourage you to seek counsel before moving forward on such a controversial matter and strive to create a comprehensive culture of health.
Alan Wang is the President of UBF and serves as the lead consultant. He has delivered the UBF solution set throughout the world and is highly regarded for his areas of expertise. You can follow him on Twitter @UBFconsulting.