Can “Wellness Program” Require You to Complete a “Health Risk Assessment”? Yes, But...

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Employers pay for health insurance; so do employees.

To reduce medical risks related to poor physical fitness and diet, employers are increasingly requiring employees to complete a “health risk assessment” (called HRAs). If an employee smokes, they are charged a higher rate (if they lie and file a claim, they are denied payment). 

Our employment class will read and discuss an interesting new case under the Americans with Disabilities Act. (E.E.O.C. v. Orion Energy Systems, Inc., link here: https://hr.cch.com/ELD/EEOCOrion091916.pdf)

Orion Energy Systems offered a self-insured health plan (that means they paid directly on claims, cutting out the insurance companies).

Everyone qualified for health insurance BUT employees who refused to complete the HRA paid 100% of the premium ($1,130.83 per month for family coverage). The company paid part of the premium if an employee completed the HRA.

The HRA was a questionnaire on health history, body circumference, and a blood draw. 
Orion did not see an individual’s data. 
A hospital clinic collected the data. 
An outside lab analyzed the lab work. 
A third company aggregated the data and provided Orion with health risk factors for the employee group, e.g., your employees are prone to be diabetic.

The legal problem here is that the ADA prohibits medical exams of employees. 
The law makes an exception, however, for third-party insurance companies, HMOs, and similar (e.g., Aetna). They are allowed to collect medical information to assess their underwriting risk. They are also strictly prohibited from sharing data with the employer.
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Enter Wendy Schobert, employed in Orion’s accounting department until she was fired. She opted out of the HRA and faced steep premiums. She raised questions about the new wellness initiative, including the HRA. Schobert questioned whether medical information collected in the HRA would remain confidential. She also questioned how the premium amount was calculated, and believed it was excessive in light of the service fee Orion was paying its third-party administrator, Auxiant. (She knew the amount of that fee because her job duties involved paying the firm’s invoices.)

The court split its ruling.

It upheld the employer’s 100% premium shifting for all employees who refuse to participate in the HRA.

The court said: “A corporation is not required to fully pay for an employee’s health insurance—indeed, it is not required to provide health insurance at all—and it is not unlawful to give an employee a choice regarding her health benefits provided the choices are among lawful alternatives.”

The court added: “Here, the wellness program was not used to underwrite, classify, or administer risk. Orion adopted the wellness program in 2009 separately from the terms of its health benefit plan and did not amend its health benefits summary plan to include the wellness initiative.”

In other words, the insurance plan was one document (and its own policy); and the health risk assessment was separate, according to the court.

The court ruled in favor of Schobert on her ADA retaliation claim: “Here, it is undisputed that Schobert expressed concern about the confidentiality of her medical information under the new wellness initiative. As that is a legitimate concern under the ADA, i.e., something the ADA actually does govern, her expression may have been protected.”