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Avoid the Pan and the Fire: Beware of New Policies Violating Old Regulations

Published:  August 27, 2014

As employers are all too aware, the workplace is a minefield of regulations. While a new mine, the Affordable Care Act (ACA), is on everyone's mind as the compliance deadline is rapidly approaching for many, it is important not to forget the other mines in the field. Recently, the Equal Employment Opportunity Commission (EEOC) brought a suit against a Wisconsin employer arising from the wellness program that was part of the employer's medical plan.

The ACA has many incentives for employers to have employee wellness programs. However, these wellness programs must be designed to promote health or prevent disease, designed to be available to all similarly situated employees, and must have alternative means for employees to qualify for the same rewards.

In EEOC v. Orion Energy Systems, the employer's wellness plan provided that the employer would pay for 100% of the health insurance premiums for employees who participated in its "voluntary" wellness program, but employees who chose not to participate would be responsible for 100% of the premiums themselves. Additionally, the wellness program required employees to complete a Health Risk Assessment (HRA), which appears to include blood work and employee self-disclosure of his or her medical history, complete a medical history questionnaire, and using the employer's range of motion machines. The EEOC alleges, among other things, that this wellness program violates the Americans with Disabilities Act (ADA) because the financial penalty is too great for the program to be considered "voluntary" and, therefore, employees were forced to participate in medical examinations and inquiries that were not job related.

This illustrates how important it is to carefully review policies annually and contact employment counsel prior to putting a new policy in place. Additionally, if you have not already started preparing for ACA compliance, now is a good time to start, attend our seminar: “The 411 on the Affordable Care Act: What Every Employer Must Know and Do to Comply” on September 11, 2014. Click here for more information.

If you have any questions regarding the Affordable Care Act or how policies imply other regulations, please contact any of the attorneys at Royal LLP at (413) 586-2288.

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