In a case of first impression, as reported by our Disability, Leave & Health Management Blog, a recent decision by a Florida federal district court has upheld an employer’s use of financial incentives to motivate employees to complete health risk appraisals as part of its group health plan. The class action centered on alleged violations of the Americans with Disability Act (ADA) by the employer, Broward County. In short, the court found that the County’s program fell within the ADA’s safe harbor provisions and, therefore, did not violate Title I of the ADA.
From an employee benefits perspective, this case may be instructive for employers seeking to design wellness programs to be part of their employer-sponsored group health plans, subject to the Employee Retirement Income Security Act (ERISA). This can be critical for employers that want to take advantage of certain aspects of ERISA, such as its preemption power over certain state laws.
As a governmental employer, the County’s group health plan would not be subject to ERISA. However, the court found its wellness program to be part of its group health plan based on the following factors:
- The insurance carrier paid for an administered the program as part of its contract with the County.
- Only the employees who were enrolled in the County’s group health plan could enroll in the wellness program.
- The description of the wellness program and its requirements were set forth in group health plan documents, causing the wellness program to be a term of the group health plan.
These factors certainly are not binding on courts deciding cases involving ERISA plans. However, employers sponsoring wellness programs they hope to be ERISA-covered should consider incorporating these and possibly other factors into their plan design.