Workers are encountering a brave new world when they sign up for health care coverage through their employers.
Increasingly, employers are leaning toward a tiered system of insurance premiums. Employees who smoke, are overweight, have high cholesterol or even heart disease might end up paying more than some of their colleagues.
A decision by the U.S. Court of Appeals for the Eleventh Circuit in Atlanta handed a victory to employers who want to explore new ways to cut their share of health costs. The unanimous panel found it is not a violation of the Americans with Disabilities Act of 1990 to mandate wellness programs with added charges for employees who refuse to participate.
Bradley Seff, a former court reporter for Broward County, fought the program by filing a class-action lawsuit in August 2010. He took his case to the Eleventh Circuit after U.S. District Judge K. Michael Moore in Miami ruled for the county on summary judgment.
“I was shocked,” Seff said of the Aug. 20 decision. He has retired and is living in Holly Springs, North Carolina. “These judges are idiots. I thought it was a total invasion of somebody’s privacy. The purpose behind it was to monitor employees.”
Fort Lauderdale attorney Donna Ballman, who is not involved in the case, called the decision “appalling” and said it was “a great example of employers becoming Big Brother and using Orwellian jargon to make their invasion of privacy seem more palatable.”
Wellness programs are a way for employers to obtain information about their employees’ health, she said. Employers then can target workers in other areas, such as false evaluations to justify dismissal before health care costs add up.
“The fact that the courts are allowing employers to get away with such insidious programs demonstrates the need for Congress and our state legislators to enact protections to keep employers out of our medical records and off our bodies,” said Ballman, whose book Stand Up For Yourself Without Getting Fired  is set for release this week.

‘Thorny Issue’
A call to the Broward County attorney’s office for comment was not returned.
Andrew C. Hall of Hall, Lamb and Hall in Miami, who was not involved in the litigation, said from an at-will employment perspective, an employer has the right to adjust compensation based upon health risks, but worker health programs could get complicated when it involves a government agency.
“Legality will depend on what has been laid out in the collective bargaining agreement and the governmental entity’s own ordinances,” he said. “Regardless, this is an incredibly thorny issue with significant consequences; issues will continue to unfold as both parties staunchly defend their position.”
Seff filed suit after Broward County adopted its wellness program in 2009. Employees were required to participate or pay $20 though a payroll deduction twice a month. The program consisted of a biometric screening, which included taking blood from a finger prick for glucose and cholesterol checks, and an online questionnaire.
Broward’s health insurer, Coventry Healthcare, used the information to check for asthma, congestive heart failure, diabetes, hypertension and kidney disease. Employees with risk factors could then participate in a “coaching program” to become eligible for co-pay waivers on some medications.
Other employers have asked workers to sign a document that they do not smoke or use tobacco products. If they do smoke, they are subject to a higher monthly premium. Some businesses are exploring whether to tie body mass index measurements to premiums.
“Employees should not have to pay extra if they don’t want to give their employer blood samples and answer questions about their health,” Ballman said.
She said wellness programs may be fraught with misuse. Medical information can be leaked to a supervisor or human resources, and there are potential violations of federal laws that prohibits the disclosure of personal medical history, Ballman added.
Ballman said insurance companies sometimes leak information about an employee. In a case that did not lead to litigation, she said she learned of a short-term disability carrier that wrote a report to a company disclosing in detail an employee’s disability. “It’s not that unusual for insurance companies to issue reports disclosing information about employees. I haven’t seen a situation involving a wellness program, but the risk is there,” she said.
The Eleventh Circuit opinion found that the plan in Broward, which suspended the extra charges in January 2011, did not violate the ADA and fell under the law safe harbor provision.
The provision states the ADA “shall not be construed” as prohibiting a covered entity “from establishing, sponsoring, observing or administering the terms of a bona fide benefit plan that are based on underwriting risks, classifying risks or administering such risks that are based on or not inconsistent with state law.”

Safe Harbor
Judge Susan H. Black wrote the opinion and was joined by Judge Stanley Marcus and U.S. District Judge Orinda Evans of Atlanta, sitting by designation.
Black noted health insurance was not withheld from workers who balked at the testing, and the fee was meant only to increase enrollment in the wellness program.
Seff’s attorney, Daniel R. Levine, a partner with Shapiro, Blasi, Wasserman & Gora in Boca Raton, said he felt that, based on the testimony of a county representative, the wellness program was not part of the insurance plan and thus not covered by the safe harbor provision.
“It was almost an ancillary issue,” Levine said. The court “didn’t really get to the heart of the matter, and this is whether this can truly be considered a voluntary program when you are losing pay when you don’t participate. Instead, the district court went in this other direction.”
Attorney Robin Symons, a partner in Gordon Rees in Miami who represents companies on employment issues, said the decision is good news for employers with or considering wellness programs. But the Eleventh Circuit decision was far from definitive. She advised employers to proceed with caution, especially when deducting fees from workers’ paychecks.
“Penalties for not participating in any employer-sponsored program are more likely than positive incentives to lead to expensive litigation, in addition to the friction and morale issues which precede formal claims,” Symons said.
All this is little solace to Seff, who sees a slippery slope coming for workers.
“I hate to see employers with a green light to be able to delve into people’s medical records and check them out. It’s none of their business,” he said. “You can’t tell me that some employer one day is not going to hire somebody because they are a risk. You have two applicants, and one has diabetes or a risk for cancer. Which one do you think will be hired?”
Ballman said unions could take the lead in fighting for restrictions on wellness programs in contract negotiations. But she noted, “Most employees aren’t lucky enough to have union representation.”
John Pacenti can be reached at jpacenti@alm.com or at (305) 347-6638.