More Carrot, Less Stick: Workplace Wellness Programs & The Discriminatory Impact of Financial and Health-Based Incentives

INTRODUCTIONDale Arnold, an employee of Flambeau, Inc. ("Flambeau"), a Wisconsinbased manufacturer and distributor of industrial, commercial, and consumer plastic, went on medical leave in 2011 for treatment of his cardiomyopathy and congestive heart failure.1 In December 2011, while Arnold was on leave, Flambeau asked its employees to complete biometric testing and health risk assessments as part of the company's wellness program.2 The biometric testing collected blood work and various body measurements.3 The health assessment asked each worker to disclose his or her medical history and answer disabilityrelated questions.4 Upon returning from his medical leave, Arnold attempted to complete both the health assessment and biometric testing.5 The allotted time to fulfill the requirements as determined by Flambeau, however, had passed, and Arnold's requests to complete the testing were subsequently rejected.6Under Flambeau's wellness plan, employees who completed the assessment and testing during the designated time frame were only required to pay twenty-five percent of their health insurance premium.7 If an employee failed to meet these requirements, he or she would be penalized by being required to pay the entire premium for his or her health insurance coverage.8 Because Arnold did not fulfill the program requirements-due to his medical-related absence-Flambeau shifted the entire cost of the premium onto him.9 Arnold was unable to afford this penalty, and his coverage was subsequently terminated on January 6, 2012.10 Arnold then alerted the Equal Employment Opportunity Commission (EEOC) of the termination.11 In 2014, the EEOC filed a lawsuit against Flambeau alleging that the health risk evaluation and biometric testing requirements violated the Americans with Disabilities Act (ADA), which prohibits disability discrimination in employment, including requiring disabilityrelated disclosures.12In 2014, Honeywell International Inc. ("Honeywell"), an international manufacturer of engineering and aerospace systems and commercial and con2 sumer products, asked its employees to participate in a wellness program.13 Under the program's provisions, on a voluntary basis, employees and their spouses were screened for cholesterol, blood pressure, body-mass index, blood-sugar levels, waist circumference, and nicotine.14 Honeywell offered employees who chose to undergo testing between $250 and $1500 credited to their health savings accounts.15 Employees who decided not to undergo testing faced several penalties, including an additional $500 payment for health insurance and a $1000 surcharge based on the presumption that they use tobacco.16 If a married employee's spouse was covered by Honeywell's insurance and refused to sit for the screening, the employee received an additional $1000 tobacco surcharge.17Honeywell claims that its corporate wellness program serves dual purposes: to inform employees about their health status in an effort to support their overall wellbeing and to prevent healthy employees from subsidizing healthcare premiums for less healthy employees.18 The program works by collecting the cumulative data of participants.19 The employer then creates initiatives designed to combat diseases prevalent among participants that contribute to rising healthcare costs, such as obesity and high blood pressure.20The sizable amount of money that Honeywell charges employees for noncompliance, however, caught the attention of federal regulators.21 In October 2014, the EEOC filed a lawsuit against Honeywell in the U.S. District Court in Minneapolis arguing that the program violates the ADA and the Genetic Information Nondiscrimination Act ("GINA"). 22Both Flambeau's and Honeywell's programs are part of a growing trend of workplace wellness initiatives designed to improve employee health and to control the cost of healthcare.23 Many employers attempt to boost their wellness programs by setting higher health standards and rewarding employees for healthy behavior. …