Equal Emp't Opportunity Comm'n v. Flambeau, Inc.

• Decision Date: 30 December 2015
• Docket Number: 14–cv–638–bbc
• Citation: 131 F.Supp.3d 849
• Parties: Equal Employment Opportunity Commission, Plaintiff, v. Flambeau, Inc., Defendant.
• Court: U.S. District Court — Western District of Wisconsin

131 F.Supp.3d 849

Equal Employment Opportunity Commission, Plaintiff,

v.Flambeau, Inc., Defendant.

14–cv–638–bbc

United States District Court, W.D. Wisconsin.

Signed December 30, 2015

Filed December 31, 2015

Brian Charles Tyndall, Equal Employment Opportunity Commission, Milwaukee, WI, Jean P. Kamp, U.S. Equal Employment Opportunity Commission, Chicago, IL, for Plaintiff.

Stephen Alfred Di Tullio, John C. Gardner, Dewitt Ross & Stevens S.C., Madison, WI, for Defendant.

OPINION AND ORDER

BARBARA B. CRABB

, District Judge

Plaintiff Equal Employment Opportunity Commission has filed this civil action against defendant Flambeau, Inc., alleging a violation of the Americans with Disabilities Act. Specifically, plaintiff contends that defendant violated 42 U.S.C. § 12112(d)(4)(A)

, which generally prohibits employers from requiring their employees to submit to medical examinations, by conditioning participation in its employee health insurance plan on completing a "health risk assessment" and a "biometric screening test." Defendant responds with the argument that although requiring employees to complete the risk assessment and biometric test might violate § 12112(d)(4)(A) in some circumstances, here the assessment and testing requirement fell within the ADA's "safe harbor," which provides an exemption for activities related to the administration of a bona fide insurance benefit plan. Defendant also contends that plaintiff's claim fails because completing the assessment and test was not the type of "required" exam prohibited by § 12112(d)(4)(A). Defendant required employees to complete the assessment and test only if they wanted to participate in the company's insurance plan. Defendant argues that when viewed from this perspective, the assessment and testing were entirely voluntary and therefore not prohibited by § 12112(d)(4)(A). The parties have each filed and briefed cross–motions for summary judgment, both of which are pending review.

I am denying plaintiff's motion, granting defendant's motion and entering judgment in defendant's favor. Although the applicability of 42 U.S.C. § 12112(d)(4)(A)

to the specific type of medical examination requirement at issue here has not been addressed by the Court of Appeals for the Seventh Circuit, I conclude that the protections set forth in the ADA's safe harbor enable employers to design insurance benefit plans that require otherwise prohibited medical examinations as a condition of enrollment without violating § 12112(d)(4)(A). In light of this conclusion, it is unnecessary to address the parties' arguments with respect to whether the assessment and testing is actually "required" in the manner prohibited by § 12112(d)(4)(A). It is also not necessary to address plaintiff's request for a finding that it satisfied its statutory conciliation obligation set forth in 42 U.S.C. § 2000e–5(b) or defendant's request for a finding that plaintiff is not entitled to punitive damages.

From the parties' proposed facts, I find that the following are relevant and not genuinely disputed.

UNDISPUTED FACTS

Defendant manufactures and sells plastic products internationally. The company employs at least 15 people, is engaged in an industry affecting commerce and is a "covered entity" subject to the ADA. One of defendant's manufacturing facilities is located in Baraboo, Wisconsin, which is where Dale Arnold worked from 1990 until 2014.

Defendant offers its employees various employee benefits, one of which is the ability to participate in its health insurance plan. The plan is self–funded and self–insured, but is administered by United Medical Resources. Participation in the health insurance plan is wholly voluntary.

Employees are not required to participate in the plan as a condition of their employment. However, Dale Arnold participated regularly in the insurance plan.

In October 2010, defendant established a "wellness program" for those employees that wanted to enroll in defendant's health insurance plan for the 2011 benefit year. The wellness program had two components—a health risk assessment and a biometric test. The health risk assessment required each participant to complete a questionnaire about his or her medical history, diet, mental and social health and job satisfaction. The biometric test was similar to a routine physical examination: among other things, it involved height and weight measurements, a blood pressure test and a blood draw.

The information gathered through the wellness program was used to identify the health risks and medical conditions common among the plan's enrollees. Except for information regarding tobacco use, the health risks and medical conditions identified were reported to defendant in the aggregate, so that it did not know any participant's individual results. Defendant used this information to estimate the cost of providing insurance, set participants' premiums, evaluate the need for stop–loss insurance, adjust the co–pays for preventive exams and adjust the co–pays for certain prescription drugs. Defendant also sponsored weight loss competitions, modified vending machine options and made other "organization–wide changes" aimed at promoting health in light of the fact that a high percentage of defendant's employees appeared to suffer from nutritional deficiencies and weight management problems.

For the 2011 benefit year, which was the first year the wellness program was in place, defendant promoted the program by giving employees a $600 credit if they participated and completed both the health risk assessment and the biometric test. For the 2012 and 2013 benefit years, however, defendant eliminated the $600 credit and instead adopted a policy of offering health insurance only to those employees that completed the wellness program. Participating in the wellness program was not a condition of continued employment, but defendant offered company–subsidized health insurance under its benefit plan to wellness program participants exclusively.

For the 2011 benefits year, Dale Arnold participated in the wellness program, enrolled in defendant's insurance plan and received the $600 credit. However, for the 2012 benefits year, which was the first year participation in the wellness program was required, Arnold failed to complete the program's assessment and tests by the established deadline. Consequently, defendant discontinued Arnold's insurance. Defendant gave Arnold the option of paying the COBRA rate for continued coverage through 2012, but Arnold declined because he thought the insurance under defendant's benefit plan was too expensive without the subsidy.

Soon after losing his coverage, Arnold filed a union grievance, a complaint with the Department of Labor and a complaint with the EEOC. After discussions with the Department of Labor, defendant agreed to reinstate Arnold's insurance if Arnold completed the plan's required testing and assessment and made his premium contributions. When Arnold agreed, his insurance was reinstated retroactive to January 1, 2012. Despite the compromise reached by Arnold, the Department of Labor and defendant, plaintiff filed this lawsuit on Arnold's behalf, asserting that the plan's testing requirement violated § 12112(d)(4)(A)

's ban on employer mandated medical examinations.

OPINION

The sole claim at issue in this case is the alleged violation of 42 U.S.C. § 12112(d)(4)(A)

, which provides that a "covered entity shall not require a medical examination ... unless such examination is shown to be job–related and consistent with business necessity." In plaintiff's view, defendant violated § 12112(d)(4)(A) by requiring its employees to complete the wellness program's health risk assessment and biometric screening tests before they could enroll in defendant's health insurance benefit plan.

Defendant argues in response that its practice of conditioning enrollment in its benefit plan on completion of the wellness program is protected by the ADA's "safe harbor" for insurance benefit plans set forth in 42 U.S.C. § 12201(c)(2)

. Section 12201(c)(2) provides in relevant part that the ADA "shall not be construed to prohibit or restrict" an employer from establishing or administering "the terms of a bona fide benefit plan that are based on underwriting risks, classifying risks, or administering such risks." Defendant contends that the wellness program requirement constituted a "term" of its health insurance plan and that this term was included in the plan for the purpose of underwriting, classifying and administering health insurance risks. For the reasons set forth below, I agree with defendant that the wellness program requirement is protected by the safe harbor. Accordingly, defendant is entitled to summary judgment in its favor.

As an initial matter, I note that the application of the safe harbor to employer–sponsored wellness programs is a matter of first impression in this circuit. In light of the lack of authority on this issue, defendant urges this court to follow the approach taken by the district court in Seff v. Broward County , 778 F.Supp.2d 1370 (S.D.Fla.2011)

, and affirmed by the Court of Appeals for the Eleventh Circuit in Seff v. Broward County, Florida , 691 F.3d 1221 (11th Cir.2012), which extended the safe harbor to a wellness program similar to the one at issue here.

In Seff ,

a former Broward County employee filed a class action alleging that Broward County violated § 12112(d)(4)(A) by deducting $20.00 from the bi–weekly paychecks of all of its employees that enrolled in Broward County's group health plan but refused to participate in Broward County's employee wellness program. Seff , 691 F.3d at 1222. Like the wellness program at issue here, Broward County's program involved both "biometric screening," which included a blood glucose and cholesterol test, and an "online Health Risk Assessment," which required employees to complete a confidential health questionnaire. Id. The plaintiff in Seff claimed that Broward County violated § 12112(d)(4)(A)...