Will
it be common, in the near future, for employers
to penalize or reward employees for meeting personal
health improvement goals, such as stopping smoking or losing
weight?
What are the legal risks for employers who make it
mandatory for staff members to participate in wellness
programs?
The high cost of health insurance for employers is driving
more organizations to set up wellness programs that encourage
healthier lifestyles. Some employers even mandate that
employees participate and meet certain goals.
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The Labor Department Warns
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Compliance with the HIPAA nondiscrimination provisions
does not in any way reflect compliance with other laws,
including:
- Provisions of ERISA
(including COBRA and ERISA's fiduciary provisions).
- State or federal
laws (such as the Americans with Disabilities
Act or the Age Discrimination in Employment
Act).
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Here's
an aggressive example: Clarian Health in Indianapolis
will soon require employees who participate in medical
insurance plans to complete a health screening and "Health
Risk Appraisal." The screening will include tests for body
mass index ratio of height to weight, blood pressure,
cholesterol and blood glucose.
Also new will be
health risk charges levied against certain employees. For
example, there will be a $5 per paycheck charge for
medical plan participants who have used tobacco within six
months of their Health Risk Appraisal completion date,
according to an announcement issued by Clarian. "This is an
effort within our health plan changes to provide an incentive
for employees to adopt healthier lifestyle habits," the
announcement added.
The changes will be phased in in
2008 and 2009 to give employees time to make lifestyle
changes. Clarian is providing screenings and resources to help
staff members achieve goals in the meantime.
"The
information provided in the Health Risk Assessment will not be
used to exclude anyone from our medical insurance plans,"
emphasized a Clarian spokesman. "We hope that employees learn
about one or more health risks they may not have been aware
of, they will take steps to protect their health and, by
addressing those risks, no longer fall into a high-risk
category for some or even all of the risks identified by the
time the 2009 plan changes take effect."
New Regulations Provide Some
Flexibility
In the past, some employers were
cautious about wellness program requirements because they
didn't want to violate employment discrimination
laws.
But new U.S. Department of Labor regulations,
which became effective on July 1, 2007, spell out what
employers can, and cannot, do in wellness programs so they are
not discriminatory under the Health Insurance Portability
and Accountability Act (HIPAA).
The new
nondiscrimination regulations give employers some flexibility
in their wellness
programs.
Background: The "health factors" are:
- Health status and medical
condition, including both physical and mental
illnesses.
- Claims experience.
- Receipt of health care.
- Medical history and
genetic information.
- Evidence of insurability,
including conditions arising from domestic violence, as well
as participation in activities such as motorcycling,
snowmobiling, all-terrain vehicle riding, horseback riding
and skiing.
- Disability.
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Answers From the Labor
Department |
Here
are some answers to frequently asked questions from the U.S.
Department of Labor to help clarify the new
rules.
Q. Are
wellness programs allowed under HIPAA's nondiscrimination
rules?
A. The HIPAA
nondiscrimination provisions generally prohibit group health
plans from charging "similarly situated" individuals
different premiums or contributions or imposing different
deductible, copayment or other cost sharing requirements
based on a health factor. (Examples of similarly situated
employees are all part-time or all full-time employees or
all employees working in different geographic locations.)
However, despite the prohibition on charging
different amounts, there is an exception that allows plans
to offer wellness programs.
If none of the conditions for obtaining a reward under a
wellness program are based on an individual satisfying a
standard related to a health factor, or if no reward is
offered, the program complies with the nondiscrimination
requirements (assuming participation is made available to
similarly situated individuals). Examples are programs that:
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Reimburse all or part of
the cost for memberships in a fitness center.
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Involve diagnostic
testing with a reward for participation rather than
outcomes.
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Encourage preventive care
by waiving the copayment or deductible requirement for the
costs of prenatal care or well-baby visits.
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Reimburse employees for
smoking cessation program costs without regard to whether
they quit.
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Provide a reward to
employees for attending a monthly health education
seminar.
Wellness programs that condition a reward on an
individual satisfying a standard related to a health factor
must meet five requirements described in the final rules in
order to comply with the nondiscrimination rules.
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The total reward for all
the plan's wellness programs that require satisfaction of
a standard related to a health factor is limited.
Generally, it must not exceed 20 percent of the cost of
employee-only coverage under the plan. If dependents (such
as spouses and dependent children) can participate in the
wellness program, the reward must not exceed 20 percent of
the cost of the coverage in which an employee and any
dependents are enrolled.
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The program must be
reasonably designed to promote health and prevent
disease.
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The program must give
eligible individuals the opportunity to qualify for the
reward at least once per year.
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The reward must be
available to all similarly situated individuals. The
program must allow individuals a reasonable alternative
(or waiver) for obtaining the reward if they find it
unreasonably difficult to satisfy the initial standard due
to a medical condition, or because it is medically
inadvisable.
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In all materials, the
plan must disclose the terms of the program and the
availability of a reasonable alternative standard (or the
possibility of a waiver).
A. Since the plan's
program does not base any reward on the outcome of the
testing, it is allowed under the HIPAA nondiscrimination
provisions without being subject to the five requirements
for wellness programs described above.
A. For a group health
plan to maintain a premium differential between smokers and
nonsmokers and not be considered discriminatory, the plan's
nonsmoking program would need to meet the five requirements
for wellness programs that are listed above.
The rising cost of health and disability insurance is
causing many employers to consider turning voluntary wellness
initiatives into mandatory programs -- and forcing employees
to change their lifestyles. However, while the new HIPAA
nondiscrimination regulations provide employers some
flexibility, keep in mind that wellness requirements must be
handled carefully to comply with various
laws. |
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