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Employees Challenge Employer’s Wellness Program Incentive

CATEGORY: Client Update for Public Agencies
CLIENT TYPE: Public Employers
DATE: Aug 07, 2024

Quad/Graphics, Inc. (Quad) offers its employees a choice to participate in an optional “wellness program,” where employees undergo a biometric screening that tests their blood sugar, blood pressure, cholesterol, triglycerides/high-density lipoprotein, and body mass index. If employees undergo the screening and their test results meet certain standards, they receive a discount on their medical insurance premiums.

A group of employees (plaintiffs) who chose not to participate in the biometric screening sued Quad alleging violations of the Americans with Disabilities Act (ADA). Initially, Quad provided a grace period to give employees sufficient time to elect to participate in the biometric screening. During the grace period, all employees, including the plaintiffs, received the discount to their medical insurance premiums. After the grace period ended, only employees who completed the biometric screening and met the test standards continued to receive the discount. Since the plaintiffs had not participated in the biometric screening, their premiums went back to their original, baseline rates, which were approximately $34 higher than the discounted rates.

The plaintiffs claimed that Quad’s wellness program violated the ADA’s prohibition of employer-based medical examinations and inquiries. Under the ADA, covered employers are not allowed to require a medical examination or make inquiries that assess whether an employee is an individual with a disability unless the examination or inquiry is job-related and consistent with business necessity. The ADA provides an exception for “voluntary” medical examinations, including ones that are part of an employee health program. The parties did not dispute that the biometric screening was a medical examination.

Quad filed a motion to dismiss the lawsuit. The District Court assessed whether the biometric screening was voluntary. Plaintiffs argued that the monthly charges to their insurance premiums were imposed because they failed to complete the biometric screening, which was a significant penalty. They argued the participation in the biometric screening was coercive and therefore, not voluntary. Quad claimed that employees who elected not to participate in the biometric screening were paying the original costs of the premiums. Quad argued that it was not a penalty, rather the employees who underwent the biometric screening were merely receiving a premium discount.

The District Court stated that the ADA did not include a definition of what “voluntary” means. The District Court determined that whether a medical examination is voluntary is a question of fact. It found that plaintiffs sufficiently alleged evidence to show that Quad’s wellness program and biometric screening was not voluntary based on the motion to dismiss standard and denied Quad’s motion to dismiss, thereby allowing the lawsuit to move forward.

Diment v. Quad/Graphics, Inc., 2024 U.S. Dist. LEXIS 103895, *1.

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