CVS Caremark Corp. made headlines last week when it announced that it will require all of its employees to undergo a medical exam or pay a $600 yearly penalty.

Such programs aim to cut health care costs and increase productivity, but some critics contend that they violate employee privacy and could lead to discrimination against sick workers, Thomson Reuters reports.

Several courts, however, have upheld similar health programs. Just last year the 11th Circuit struck down a lawsuit from Bradley Seff, an employee of Broward County, Fla., who sued the county for charging him an extra $40 monthly health insurance fee after he would not participate in a medical screening.

Seff argued that the employee wellness program violated the Americans with Disabilities Act (ADA)  by making medical inquiries of workers, but the appeals court found that the plan fell under an ADA safe harbor provision that allows companies to “[administer] the terms of a bona fide benefit plan that are based on underwriting risks.”

CVS says that it will not be privy to any employee health information, and that the results of the health screenings will go to the program’s third-party administrator, WebMD.

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