Americans with Disabilities Act (ADA)

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Inappropriate interview questions create a risk of discrimination claims under various state and federal anti-discrimination laws.  (For example, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, and the Americans with Disabilities Act, as amended by the Americans with Disabilities Amendments Act.)   Therefore, when interviewing an applicant for a job, you must avoid questions relating to race, sex, national origin, age, pregnancy, religion and disability, which are irrelevant as to whether he or she is qualified for the job.

Even asking questions that do not appear discriminatory on their face may be considered unlawful when they screen out a disproportionately high percentage of candidates on the basis of protected status and are not justified by any business purpose.  For example, asking about whether an applicant owns their own home could be considered racial discrimination.

Continue Reading Can I Ask About This? Interview Do’s and Don’ts

833112_20794558Prior to the EEOC’s lawsuit against Orion Energy Systems, Inc., filed on August 20, 2014 in  federal court in Green Bay, WI, the EEOC had only commented on the validity of wellness programs under the ADA twice and then only in its informal discussion letters.[1] The EEOC maintained in both of its informal discussion letters that mandatory participation in either completing health risks assessments or a wellness program violates the ADA while voluntary participation does not.   The EEOC reasoned that mandatory participation would require a disabled employee to share information of his or her medical condition, something that employers are not permitted to do unless the health-related questions are job-related and consistent with business necessity.  The EEOC also commented that surcharges for nonparticipation or reward for participation commute a voluntary program to involuntary status.   After the passage of the Affordable Care Act (ACA), the EEOC held a public forum to explore wellness programs and the legality of surcharges or rebates for participation under the ADA in May 2013, acknowledging that the ACA and HIPAA already permit employers to charge premium variances for participation in wellness programs and tobacco use.  The EEOC advised it intended to issue guidance following the forum, but it has not done so to date.  Possibly this lawsuit is its response.

Nothing in the ADA prohibits an employer from including a mandatory wellness program in its welfare benefit plan because the inclusion of such a program in no way impacts the employee’s job or any accommodation the employee may need to perform that job.  The medical questions prohibited by the ADA are those associated with employment decisions about an employee’s ability to do a particular job, not an employee’s participation in the employer’s healthcare coverage.  Furthermore, those same employees have likely already provided the same medical information required by a wellness program in order to participate in any healthcare offered by the employer.  The confidentiality tied to information provided by an employee for purposes of health care coverage also applies to information provided for the purpose of participating in a wellness program, and the employer does not have access to that information.  Employers, especially self-funded plans, could build a wall between the two functions (employment hiring, placement and promotions separate from benefit plans and enrollment) to avoid further ADA scrutiny.

[1] EEOC Informal Discussion Letter: ADA: Health Risk Assessments, August 10, 2009;

EEOC Informal Discussion Letter: ADA & GINA: Incentives for Workplace Wellness Programs, June 24, 2011.

812863_90858969I disagree with the EEOC –  an employer does not violate the Americans with Disabilities Act (ADA) by offering health insurance premium discounts to those who participate in its wellness program.

Orion Energy Systems, Inc., a publicly traded company based in Manitowoc, WI, was sued by the EEOC on August 20, 2014, in an action pending in federal court in Green Bay, WI.  The EEOC has alleged that the company violated the ADA in requiring their employee to participate in its wellness program, and then charging her a higher monthly health insurance premium and fining her $50 for refusing to participate.  The EEOC contends that her ultimate termination was due to her failure to participate in the wellness program.  The EEOC also sought to enjoin the employer from requiring employees to respond to medical or disability-related questions on the Health Risks Assessments (HSA).

Followers of this intriguing issue also know of the 2011 opinion from a federal court in Florida that upheld the validity of a wellness program that imposed a $20 bi-weekly surcharge on employees who did not participate in the wellness program.  The program only required participants to provide a blood sample for glucose and cholesterol tests without regard to the outcome of those tests.   The court held that the wellness program, designed to mitigate risks so that employees could get involved in their own healthcare, was permissible under the ADA.

I don’t agree with the EEOC that an employer violates the ADA if it discounts health insurance premiums for those employees who participate in an employer’s wellness program. The ADA contains a safe harbor provision for bonafide benefit plans based on underwriting, classifying or administering risks as long as the safe harbor provision is not used as a subterfuge to evade the purposes of the ADA.[1]  The purpose of the safe harbor provision is to permit development and administration of benefit plans using accepted principles of risk assessment.

Is it not an accepted principle of risk assessment for a wellness program to reward employees who participate so as to mitigate the insured risk?  If acceptable and not meant as a subterfuge for discrimination against the disabled, then the practice of imposing surcharges on nonparticipants or rewards for participants should not violate the ADA.  The ADA is meant to protect employees who are disabled by requiring employers to accommodate their disability assuming the employee can perform the essential functions of the job.  The ADA does not pertain to the type of healthcare coverage an employer offers to its employees.

Besides, the Affordable Care Act (ACA) and interpretive regulations[2] permit employers to monetarily incentivize employees to participate in wellness programs and penalize those employees who smoke by permitting premium surcharges, in addition to meeting certain requirements under the ACA and Health Insurance Portability and Accountability Act (HIPAA).

The United States Supreme Court has also spoken, stating that employers are free to design employee welfare benefit plans as they choose.  Black & Decker v. Nord, 538 U.S. 822 , 832 (2004), cert. denied, 543 U.S. 815 (2004)(“employers have large leeway to design disability and other welfare plans as they see fit”).

So then, aren’t employers legally permitted to design and implement wellness programs imposing surcharges and rewards without violating the ADA?

[1] 42 U.S.C.S. §12201(c).

[2] 29 CFR §2590.