Seventh Circuit Dismisses Wellness Plan Case

On Jan. 25, 2017, the U.S. Court of Appeals for the Seventh Circuit dismissed the EEOC’s appeal in EEOC v. Flambeau, Inc., 2017 WL 359664 (7th Cir. 2017), but interestingly, did not do so on the merits of the case. As background, the EEOC sued Flambeau, Inc. on behalf of an employee whose health coverage was terminated for failure to complete a health risk assessment. While the ADA generally prohibits employers from requiring medical examinations (which would include a health risk assessment), the trial court held for Flambeau, deciding that the examination could be a condition of health plan enrollment under the ADA’s bona fide benefit plan safe harbor. The EEOC disagreed with the result and appealed to the Seventh Circuit arguing that the safe harbor should not be applicable to wellness programs.

The Seventh Circuit dismissed the EEOC’s appeal because the relief the EEOC is seeking is either unavailable or moot. The employee resigned several years ago, the employee’s health plan coverage was ultimately restored retroactively (the employee is not entitled to damages), and Flambeau has since abandoned its wellness program requirements that are at issue in this case. The court did indicate that the case addressed important issues regarding employer-provided wellness programs. However, it ultimately found that those issues should be resolved in a case where the parties have a stake in the result.

Since the EEOC’s position, as established in their final ADA and GINA wellness program regulations, is in conflict with the Eleventh Circuit (in Seff v. Broward County), further litigation on wellness incentives is likely (another appellate court decision on the merits would have provided more clarity). While the matter is being resolved in the courts, employers sponsoring wellness programs should adhere to the relevant ADA and GINA regulations, beginning with plan years commencing on or after Jan. 1, 2017.

EEOC v. Flambeau, Inc. »