HIPAA Regulatory Alert: Wellness program final rule issued for employers
HIPAA Regulatory Alert
Wellness program final rule issued for employers
The federal Departments of Health and Human Services, Labor, and Treasury have issued final rules to guide employers in complying with HIPAA nondiscrimination provisions and implementation of wellness programs.
The final rules generally do not change interim rules issued by the three agencies in 2001. The rules allow employers to provide incentives of up to 20% of the cost of coverage to encourage participants to participate in wellness programs. They clarify some issues under the HIPAA nondiscrimination provisions and give examples of wellness programs that are not subject to additional standards.
Analysts say the HIPAA nondiscrimination provisions generally prohibit group health plans from charging similarly situated individuals different premiums or contributions, or imposing different deductibles, copayments, or other cost-sharing requirements based on a health factor. But they do allow plans to offer wellness incentives to encourage program participation as long as none of the conditions for obtaining a reward are based on an individual satisfying a standard related to a health factor.
If the reward is based on satisfying a standard related to a health factor, the wellness program, among other requirements, must offer rewards equal to no more than 20% of the cost of coverage, be reasonably designed to promote health and prevent disease, and allow individuals at least one year to qualify for the reward.
The final rules give, for the first time, examples of wellness programs complying with HIPAA's nondiscrimination requirements without having to satisfy the additional standards. They include:
- programs that reimburse all or part of the cost for a fitness center membership;
- diagnostic testing programs that provide a reward for participation and don't base any part of the reward on outcomes;
- programs that encourage preventive care through waiving copayments or deductibles under group health plans for the costs of prenatal care or well baby visits, among other things;
- programs that reimburse employees for costs of smoking cessation programs without regard to whether the employee quits smoking; and
- programs that reward employees for attending monthly health education seminars.
The final rules also clarify some other issues under the HIPAA nondiscrimination provisions, and give an example of how the provisions apply to the carryover of unused employer contributions in health reimbursement arrangements.
Because the maximum reimbursement under a group health plan to any employee in any single period may vary based on the employee's claims experience, concerns have arisen about the application of HIPAA's nondiscrimination rules, the three agencies said. According to the regulations, an employer does not violate HIPAA if the maximum annual reimbursement to an employee is a uniform amount.
The final regulations were published in the Dec. 13, 2006, Federal Register, and are effective Feb. 12, 2007.
(Editor's note: Final rules can be downloaded at www.dol.gov/ebsa/regs/fedreg/final/2006009557.pdf.)
The federal Departments of Health and Human Services, Labor, and Treasury have issued final rules to guide employers in complying with HIPAA nondiscrimination provisions and implementation of wellness programs.Subscribe Now for Access
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