On January 25, 2017, in Equal Employment Opportunity Commission v. Flambeau, Inc., the Seventh Circuit rejected an EEOC challenge to an employer wellness program.  The circuit court had the opportunity to address whether an employer’s wellness program was an involuntary medical examination pursuant to the ADA, 42 U.S.C. 12112(d)(4), but instead found the issues of statutory interpretation to be moot.  As a result, employers are without what would have been welcome guidance on the ADA’s boundaries with respect to wellness programs.

Flambeau’s wellness program conditioned employer-subsidized health insurance on participation in a health risk assessment and biometric screening.  The district court found that the wellness program was permissible because it fell within the “safe harbor” provision of the ADA for bona fide benefit plans.  42 U.S.C. 12201(c)(2).  In so holding, the district court concluded the program was voluntary because an employee could decide not to participate, but remain employed.

After the EEOC initiated its lawsuit against Flambeau, the EEOC issued its 2016 Regulations relating to the Equal Employment Provisions of the Americans with Disabilities Act (the “2016 ADA Rule”) (29 C.F.R. §§ 1630.14(d)(3)).  Consistent with the EEOC’s position in Flambeau, the regulations provide that the ADA safe harbor provision does not apply to employer wellness programs.  The regulations also provide that a program such as Flambeau’s that denies benefits to those who do not participate is involuntary.

Rather than addressing the issues of statutory interpretation, the Seventh Circuit determined that the relief the EEOC sought was moot because the employee stopped working for the company before the lawsuit was filed and because the employer had stopped using the provisions at issue because they were not achieving desired cost savings.  The Seventh circuit acknowledged the importance of the statutory interpretation issues it could have reached, noting the issues impact “75 percent of firms offering health benefits that also offer wellness programs.”