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November 4, 2014

Honeywell's Wellness Strategy May Be Not So Sweet (article)

For the third month in a row, we are reporting on challenges to employer-sponsored wellness programs [see Another Wellness Program Challenged by EEOC, (10/8/14) and EEOC Challenges Wellness Program Standards (9/9/14)].

 

On October 27, 2014, the Chicago office of the Equal Employment Opportunity Commission (EEOC) filed a petition seeking a preliminary injunction against the Honeywell wellness program (EEOC v. Honeywell Int'l Inc., No. 14-cv-04517-ADM-TNL (D. Minn.).  According to the EEOC petition, the Honeywell’s health benefit plan, as part of its wellness program strategy, requires employees and their participating spouses, to undergo biometric testing.  The testing would include blood pressure screening, a blood draw for testing cholesterol and glucose levels, a BMI testing (height, weight and waist circumference), and testing for nicotine or cotinine.  Penalties for failure to undergo the biometric test by the employee and his/her spouse could result in loss of the company’s contribution toward the employee’s health savings account, a $500 surcharge applied to his/her medical plan cost, and a $1,000 tobacco surcharge even if the employees chooses not to undergo a biometric testing for reasons other than smoking; plus another $1000 “tobacco surcharge” if his/ her spouse does not undergo testing, even if the spouse declines to participate for reasons other than smoking.

 

A wellness program must run the gauntlet of many laws, certain of which have a clearer path of compliance than others.  Both the HIPAA and Affordable Care Act’s nondiscrimination based on health status rules have relatively clear guidelines (for a summary of the ACA’s wellness program rules, see the CBIZ Health Reform Bulletin, Final Rules Issued - Incentives for Nondiscriminatory Wellness Programs in Group Health Plans, 6/3/13).

 

In addition, wellness programs must comply with the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA).  Compliance with both of these laws is less straight forward.  The ADA requires that any collection of medical information be voluntary unless the collection is used in conjunction with a bona fide medical plan.  In a class action lawsuit a few years ago (see Update: Wellness Program – ADA Class Action Case, Benefit Beat, 5/12/11) the court determined that the collection of medical information in that situation was accomplished, in fact, in conjunction with a bona fide health plan and was not used as a subterfuge or a way to avoid the protections of the ADA.  The Honeywell matter seems to be questioning the “voluntariness” of the biometric testing.

In addition, GINA requires that family medical history not be used for underwriting purposes.  The requirement that a spouse must undergo biometric testing which could result in obtaining medical history is, according to the EEOC, a violation to this requirement.

 

While these challenges leave employer wellness strategies in a state of flux, whether these challenges will succeed on their merits is clearly uncertain at this point.  The good news is that, hopefully, clearer guidance will derive from these challenges.  

After hearing arguments on November 3, 2014, t
he EEOC’s request for preliminary injunction has been denied by the Court.  Thus, Honeywell is able to maintain its wellness program during the pendency of the proceedings. 

The information contained in this article is provided as general guidance and may be affected by changes in law or regulation. This article is not intended to replace or substitute for accounting or other professional advice. Please consult a CBIZ professional. This information is provided as-is with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein..

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