Close X
Attorney Spotlight

How does Jessie Zeigler anticipate the intersection of privacy and smart technology will impact the future of litigation? Find out more>


Close X


Search our Experience

Experience Spotlight

Primary Care Providers Win Challenge of CMS Interpretation of Enhanced Payment Law

With the help and support of the Tennessee Medical Association, 21 Tennessee physicians of underserved communities joined together and retained Bass, Berry & Sims to file suit against the Centers for Medicare & Medicaid Services to stop improper collection efforts. Our team, led by David King, was successful in halting efforts to recoup TennCare payments that were used legitimately to expand services in communities that needed them. Read more

Tennessee Medical Association & Bass, Berry & Sims

Close X

Thought Leadership

Enter your search terms in the relevant box(es) below to search for specific Thought Leadership.
To see a recent listing of Thought Leadership, click the blue Search button below.

Thought Leadership Spotlight

Healthcare Private Equity Compliance Checklist

The complex and ever-changing healthcare regulatory and enforcement environment, including increased focus on the role of private equity firms in their portfolio companies, make compliance a top priority for private equity firms investing in healthcare companies. The best way to limit your exposure as a private equity firm is to avoid a compliance misstep in the first place. Additionally, an effective and robust compliance program for your portfolio healthcare company makes it much more attractive to potential buyers and helps you avoid an unexpected and costly investigation or valuation hit down the road. Download the Healthcare Private Equity Compliance Checklist to assess whether your portfolio company's compliance program is up-to-date.

Click here to download the checklist.

EEOC Targets Voluntariness of Employer-Sponsored Wellness Programs


December 10, 2014

The U.S. Equal Employment Opportunity Commission ("EEOC") recently filed complaints against three employers alleging that the employers' wellness programs violate the Americans with Disabilities Act ("ADA") due to the penalties imposed on employees who chose not to complete the wellness programs' requirements.

The ADA prohibits employers from asking employees disability-related questions or requiring employees to undergo medical examinations unless those questions and examinations are job-related and consistent with business necessity. However, the ADA allows disability-related questions and medical examinations as part of a wellness program as long as the wellness program is voluntary and the information obtained is kept confidential and not used to discriminate on the basis of a disability.1 A wellness program is considered voluntary if the employer neither requires participation nor penalizes employees for not participating in the program. Many employers offer incentives to employees to encourage participation in wellness programs. The EEOC has never formally explained whether and to what extent offering an incentive effectively amounts to a requirement to participate or a penalty. The EEOC has indicated in its last two semiannual regulatory agendas that it plans to issue proposed regulations on this issue, but no regulations have been issued to date.

In the recent complaints, the EEOC alleges that the employers' wellness programs are not voluntary. The table below summarizes certain facts related to the wellness programs at issue. The employee incentives involved in these cases are significant; employees who elect to forgo participation in the programs lose "incentives" such as eligibility for health insurance coverage or 100% employer-paid premiums. That these incentives are far more easily described as penalties – loss of eligibility for health insurance or having to pay 100% of premiums – does not work in favor of finding them to be incentives. Although it is clear from the complaints that the EEOC believes the penalties at issue render the wellness programs involuntary, the complaints do not shed much light on the threshold at which an incentive is deemed a penalty that renders a wellness program involuntary.

The Health Insurance Portability and Accountability Act of 1996 ("HIPAA") also limits incentives offered under certain wellness programs.2 The Patient Protection and Affordable Care Act, as amended, increased the limit under HIPAA to 30% of the cost of health plan coverage3 and 50% of the cost of coverage for programs aimed at preventing tobacco use. For years, many practitioners have expected the EEOC to issue regulations for the ADA's voluntary requirement that correspond to the HIPAA limits. The EEOC's delay in issuing guidance may indicate the EEOC will not match the HIPAA limits after all. But most practitioners think it is unlikely the EEOC will interpret the ADA to prohibit an incentive that is clearly allowed under HIPAA solely on the basis of the amount of the incentive.

Alleged Wellness Program Requirements4
Alleged Wellness Program  Incentive or Penalty 
EEOC v. Orion Energy Systems, Civil Action, 1:14-cv-01019 (E.D. Wis.) (filed Aug. 20, 2014).
  • Health risk assessment ("HRA") that required employees to disclose medical history and have blood work.
  • Fitness test, which involved a range of motion test.
  • An employee who fails to complete the HRA must pay 100% of the premium for self-only coverage under Orion’s health plan (Orion will pay 100% of the premium for an employee who completes the HRA).
  • An employee who fails to complete the fitness test will be assessed a penalty of $50 per month.
EEOC v. Flambeau, Inc.,Civil Action No. 3:13-cv-00638 (W.D. Wis.) (filed Sept. 20, 2014).
  • HRA that required employees to disclose medical history.
  • Biometric screening that required employees to have blood work and measurements.
  • An employee who fails to complete the HRA and biometric screening loses eligibility for Flambeau's health plan (Flambeau will pay approximately 75% of the premium for an employee who completes the HRA and biometric screening).
EEOC v. Honeywell International Inc., Civil Action No. 0:14-cv-045175 (D. Minn.) (filed Oct. 27, 2014). 
  • Biometric screening that required employees and their spouses (if covered by Honeywell’s health plan) to have blood pressure screening, blood work (i.e., cholesterol and nicotine tests), and measurements.
  • An employee who fails to complete the biometric screening will:
    • lose eligibility for health savings account contributions from Honeywell (which range up to $1,500) and
    • be assessed a $1,500 surcharge on the annual health plan premium.
  • If a spouse fails to complete the biometric screening, the employee will be assessed a $1,000 surcharge on the annual health plan premium.

1 A wellness program may not be subject to the ADA's voluntary requirement if it is covered by the ADA's "health plan safe harbor" set forth in 42 U.S.C. § 12201(c)(2). See Seff v. Broward County, 692 F.3d 1221 (11th Cir. 2012). The parameters of this safe harbor are not clear, however, and it appears the wellness program must be part of a health plan and related to underwriting or classifying risks to rely upon the safe harbor.
2 The limits under HIPAA apply to "activity-only" and "outcome-based" wellness programs. An activity-only wellness program requires an employee to complete an activity related to a health factor (e.g., a physical activity) to receive a reward. An outcome-based wellness program requires an employee to achieve or maintain some health goal to receive a reward. The HIPAA limits do not apply to "participatory" wellness programs.  A participatory wellness program requires an employee to participate in an activity that is not related to a health factor, which generally means the activity must be a passive activity as opposed to a physical activity (e.g., attend a "lunch and learn" health seminar).
3 In general, the cost of coverage equals the sum of employer and employee contributions.
4 In all of the cases, it is unclear whether the employers offered to employees any alternative methods of avoiding the penalties at issue.
5 On November 6, 2014, the U.S. District Court for the District of Minnesota denied the EEOC's motion for a preliminary injunction against Honeywell's wellness program. Honeywell, No. 0:14-cv-04517 (D. Minn., Nov. 6, 2014).

Related Services


Visiting, or interacting with, this website does not constitute an attorney-client relationship. Although we are always interested in hearing from visitors to our website, we cannot accept representation on a new matter from either existing clients or new clients until we know that we do not have a conflict of interest that would prevent us from doing so. Therefore, please do not send us any information about any new matter that may involve a potential legal representation until we have confirmed that a conflict of interest does not exist and we have expressly agreed in writing to the representation. Until there is such an agreement, we will not be deemed to have given you any advice, any information you send may not be deemed privileged and confidential, and we may be able to represent adverse parties.