Wellness Programs Still Await EEOC Rules While Cases Continue

As a reminder for employers with wellness programs, the EEOC still has not replaced the final rules that were proposed – and then suspended – last year in 2021.

This means that there still is not a clear definition of what it means to have a “voluntary wellness program”. Whether an employer-sponsored wellness program is deemed voluntary or not is still in the eyes of the beholder – your employees.

It’s important to work with your legal counsel, an insurance broker’s wellness consultant like our team here at Hylant, or an attorney like Barbara Zabawa who runs the Center for Health and Wellness Law.

Employer wellness program lawsuits to watch and take note

Kwesell v. Yale University

You may recall the case of Kwesell v. Yale University which involved Yale University’s “Health Expectations Program”. Their wellness program design allegedly violated federal statutes because it required some 6,000 union employees at Yale and their spouses to either participate in its employee wellness program or pay a weekly opt-out fee. By charging some employees $25 per week ($1,300 annually) if they did not participate in the wellness program—which required employees to receive medical screenings and share the results with Yale’s health care providers—the suit alleged that Yale violated the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA), according to the Yale employees that filed for the lawsuit.

Under the settlement agreement, Yale said they would stop collecting the opt-out fees and would change its practices regarding the transfer of health data in connection with the program.

Williams, et. al v. City of Chicago

The latest case, which was filed in federal court in 2020, involves employees of the City of Chicago in Williams, et. al v. City of Chicago. Unionized City of Chicago employees sued the City of Chicago, as their employer, as well as their union, for supposedly forcing them to participate in a wellness program that includes health information collection through biometric screenings and health assessment questionnaires.

The case is quite complex and involves allegations of not only violating the Americans with Disabilities Act (ADA) and the Genetic Information Discrimination Act (GINA), but also federal Racketeering and Conspiracy claims, breach of fiduciary duty claims against union leaders, and a request for accounting claim. The request for accounting claim asks the court to require the defendants to account for how the City of Chicago has used the penalty funds it has collected from employees who have not participated in the wellness program.

The City of Chicago’s wellness program is called the “Chicago Lives Healthy Wellness Program” and has been in place since 2012. The employees state that they were required to complete a biometric screening and examination or pay a $25.00/month penalty which would be deducted from their bi-weekly paycheck. The complaint alleges that the penalty also applied if an employee’s spouse or partner did not participate in the wellness program, increasing the total penalty to $50.00 per biweekly paycheck, or $1,200 per year. Some employees complained that the potential financial penalties caused them mental stress linked to the fear of losing their jobs if they refused to participate in the wellness program. Other employees stated that they felt the program is too intrusive and infringed on their right to privacy.

The employees allege that about 85% of the employees and spouses enrolled in the wellness program only because of the threat of financial penalties. As a result, those employees have had their personal health information shared with numerous companies without their knowledge or consent. The remaining employees and spouses who did not participate in the wellness program have expressed concern that their employer has collected $1.9 million in non-participation charges.

The status as of now is that the City of Chicago filed its reply brief to its Motion to Dismiss on May 9, 2022. Now, the parties must wait for the Northern District of Illinois court to decide the motion.

EEOC Rules and hope for updates soon

We believe there may finally be EEOC guidance issued sooner than later. One of the current EEOC seats will become vacant on July 1, 2022. President Biden has nominated Kalpana Kotagal to fill this spot, yet confirmation is stalled in the Senate. The EEOC General Counsel position is also vacant, and more recently Biden announced his intent to nominate Karla Gilbride to fill this spot. Once these spots are filled, it is believed the EEOC will issue wellness guidance relatively soon (which could be 6-12 months or more).

Lessons we can learn

While we await more guidance from the EEOC, it’s important to take note that any employer with a workplace wellness program should recognize that some employees are willing to file lawsuits against employers who collect health information through workplace wellness programs. The overarching theme in all the lawsuits related to this topic to date is that employees felt like employers were violating their privacy when collecting health information and tying incentives to activities attached to collecting said health information.

Now more than ever, employers should be regularly reviewing their wellness program design for compliance with various laws with an expert and also ensure employees do not view the program as coercive or involuntary. Please reach out to your Hylant health strategist to review your wellness program design if you have questions or concerns.