Compliance with health insurance portability and accountability act (HIPAA) non-discrimination rules is a big challenge for wellness programs. The old rules were unclear about which incentives passed muster.
That’s all changed, with the rules established earlier this year by the DOL and U.S. Treasury Department. The rules themselves haven’t changed, but they’ve been clarified. Here is what you need to know –
‘Participation incentives’ are fine
As long as you structure incentives as rewards for wellness participation, the new rules provide a lot of freedom. All of these are fine under health insurance portability and accountability act (HIPAA) –
• reimbursing all or a portion of the cost of fitness center membership
• financial rewards for undergoing health risk assessments so long as the reward is based on participation rather than test results
• stimulating preventive care by waiving co-pays or deductibles for these services (i.e., well-baby visits or prenatal care)
• reimbursing workforce for the cost of use of tobacco-cessation programs without regard to the result, and
• offering rewards tied to staff attending a monthly health education seminar or working with a wellness Coach.
Conditional rewards OK if…
But what if you want to make the reward conditional on participants meeting specific health goals? Example – Workers who achieve a cholesterol count under 200 get a 20 percent reduction in the cost of their health plan contributions pending results of an annual cholesterol test.
The feds say it’s OK under health insurance portability and accountability act (HIPAA) to do this, too, but your plan must meet five additional requirements –
• The reward can’t exceed 20% of the cost of employee-only (or, when you allow dependents to participate, employee-plus-dependent) coverage under your health plan.
• The standards should be reasonable (e.g., you can’t limit rewards to folks who can run a marathon). The rewards also can’t be used as a backhanded way to negatively single out certain staff members (e.g., rewards for all non-diabetics).
• Participants must have the opportunity to qualify for the reward at least once a year (e.g., a smoker who fails to quit this year gets another chance next year).
• Rewards ought to be available to all “similarly situated person.” In other words, you can’t make a company-paid weight management program available to certain staff but not others.
When, for medical reasons, it’s unreasonably challenging for an individual to satisfy conditions that are otherwise reasonable, you must offer an alternative. Example – A pregnant staff member may not be able to meet certain standards, so you must offer her an alternative.
Negative incentives violate health insurance portability and accountability act (HIPAA)
So what’s not allowed under health insurance portability and accountability act (HIPAA)’s non-discrimination rules? Anything that punishes individuals for their medical conditions or health risks.
The rules prohibit employers from charging different premiums, contributions, co-pays or deductibles based on personal health factors such as obesity or smoking. Nonetheless, it’s OK to reimburse these expenses based on someone’s participation in your wellness program, without regard to success.
In addition, the feds have added an important new non-discrimination rule – Businesss’ heath plans can’t deny benefits for treatment of injuries resulting from a health condition, even when the condition wasn’t diagnosed before the injury.
For instance, some health care plans have a “suicide exclusion” that denies payment for treating self-inflicted wounds from a suicide try. Now let’s suppose the employee suffers from clinical depression. Even when the depression was undiagnosed before the suicide try, it’s illegal for your plan to deny benefits to this employee.
