Incentives For Nondiscriminatory Wellness Programs In Group Health Plans: Highlights From The Final Rule

General Information About The Final Rule …

On May 29, 2013, HHS, the Department of Treasury and the Department of Labor issued a Final Rule on Incentives For Nondiscriminatory Wellness Programs In Group Health Plans. The final rule clarifies the scope of HIPAA and Affordable Care Act rules governing wellness programs and incentives. It outlines criteria that a wellness program must satisfy for an affirmative defense in response to a claim that the health plan or issuer discriminated under HIPAA provisions.

Read the Wellness Incentives Final Rule Expanded Summary

HIPAA Nondiscrimination Requirements For Wellness Programs By Program Type …

Wellness programs can be either Participatory or Health-Contingent.

Participatory programs either (1) do not offer rewards or (2) offer rewards that are not based on health factors. These programs must be made available to all similarly situated individuals, regardless of health status. No other restrictions or requirements are imposed.

Health-Contingent programs require an individual to satisfy a standard related to a health factor in order to obtain a reward. Health Contingent Programs can be Outcomes-Based or Activity-Only.

Activity-Only programs require an individual to perform or complete an activity, but not achieve a specific health outcome in order to obtain a reward. *A reasonable alternative standard for obtaining the incentive must be provided to any individual who has a medical condition or restriction that makes it unreasonably difficult or inadvisable to attempt the activity.

Outcomes-Based programs require an individual to attain or maintain a specific health outcome in order to obtain a reward. *A reasonable alternative standard or waiver must be provided to all individuals who do not meet the initial standard.

5 HIPAA Nondiscrimination Criteria For Health-Contingent Programs …

Health-Contingent wellness programs must: (1) Provide individuals with the opportunity to qualify for the reward at least once per year; (2) Keep the total reward offered to an individual or any class of dependents within 30% of the premium or 50% for tobacco-related programs; (3) Be reasonably designed to promote health or prevent disease without being overly burdensome or a subterfuge for discrimination based on a health factor; (4) Make The Full Reward Available To All Similarly Situated Individuals; (5) Provide notice of a reasonable alternative standard.

Additional Rules and Considerations For “Reasonable Alternative Standards” …

Health-Contingent programs must offer a “reasonable alternative standard”. The same full reward must be available to those who satisfy the reasonable alternative as provided to those who satisfy the otherwise initial standard. In lieu of providing a reasonable alternative, a plan or issuer may always waive the applicable standard and simply provide the reward. Plans and issuers do not have to establish a particular reasonable alternative standard in advance of an individual’s specific request for one. An individual can involve a personal physician at any time and must be given the opportunity to comply with a physician’s recommendations as a 2nd reasonable alternative standard.

Verification Rules In Health-Contingent Programs …

“Verification” is when a plan or issuer requires an individual obtain verification from a personal physician that a health factor prevents the individual from meeting the otherwise applicable standard for receiving a reward/ incentive.

Outcomes-Based programs: plans and issuers cannot condition their obligation to provide a reasonable alternative standard on verification by an individual’s personal physician.

Activity-Only programs: plans and issuers may require verification as a condition of providing a reasonable alternative standard when it is reasonable to determine that medical judgment is required to evaluate the validity of the request for an alternative.

Room For Innovations …

The final regulations provide the flexibility to encourage innovation. Nothing prevents a plan or issuer from establishing more favorable eligibility rules, premium rates, or rewards for individuals with adverse health factors compared to individuals without adverse health factors.

Future Considerations …

HHS, Treasury and DOL anticipate issuing future sub-regulatory guidance to provide additional clarity and potentially proposing modifications to this final rule as necessary. Also, compliance with the HIPAA nondiscrimination and wellness provisions is not determinative of compliance with any other applicable Federal or State law, which may impose additional accessibility standards for wellness programs.

Wellness Incentives Final Rule Expanded Summary

For Questions, Please Contact:

Victoria L. Shapiro

Director of Government Affairs

vshapiro@carecontinuumalliance.org 

office: 202.737.1107

cell: 202.870.2166

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