A Florida county government established a wellness program that offered a discounted healthcare insurance premium and waived some copays for participants who agreed to be assessed for any of five diseases. If individuals were diagnosed with one of those, they were also offered disease management under the plan. One employee refused to participate and sued over participants’ discount.

What happened. “Smith” sued Broward County in federal district court, charging that its wellness program violated the Americans with Disabilities Act (ADA) by requiring medical exams. In fact, ADA bars employers from requiring physical exams or questioning employees about their medical conditions—except under very particular circumstances.

ADA’s “safe-harbor provision” allows health assessments and incentives like those in the county’s program if the program is a “term” of a bona fide benefit plan. Specifically, insurers and/or plan sponsors can offer wellness programs that are based on underwriting risks, classifying risks, or administering risks in an insurance plan. Other than those circumstances, potentially disability-related inquiries may be made to employees only if the answers are voluntary and no rewards or penalties are involved in refusing to answer.

Despite the testimony of the county’s benefits manager that the wellness program was not mentioned in the healthcare plan document, the district judge found that the program was definitely part of the plan: The same insurer provided both the healthcare plan and wellness program, and only plan participants could participate in wellness activities. Smith appealed that ruling to the 11th Circuit, which covers Alabama, Florida, and Georgia.

What the court said. Appellate judges found that, in offering the wellness and attendant disease management programs, the insurer is indeed “underwriting and classifying risks on a macroscopic level so it may form economically sound benefits plans for the future.” That satisfied judges that the program is covered by ADA’s safe-harbor provision. Seff v. Broward County, U.S. Court of Appeals for the 11th Circuit, No. 11-12217 (8/20/12).

Point to remember: This is a wellness-friendly ruling, but such programs must also comply with the Genetic Information Nondiscrimination Act (GINA) and Health Insurance Portability and Accountability Act (HIPAA) rules, which can be more complex. Finally, the Equal Employment Opportunity Employment Commission, which interprets the ADA, has indicated it wants wellness programs to show significant data that they are saving money and are necessary to avoid healthcare plan insolvency.