It’s obvious the government loves workplace wellness programs. That’s why the Health Insurance Portability and Accountability Act (HIPAA) has exceptions that allow them. But those exceptions have just changed. Here’s how:
When laws change, the traditional dates for making those changes are January 1 and July 1. Such was the case recently as the U.S. Department of Labor instituted new rules for creating workplace wellness programs that comply with existing law.
As of July 1, employers had to start making those changes on the first day of their new plan year. If your plan year is built around the calendar, as many are, you’ll need to make them on January 1, 2008.
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The law most involved is the Health Insurance Portability and Accountability Act (HIPAA). HIPAA’s nondiscrimination provisions have long decreed that if your organization offers a healthcare plan, everyone in the same situation (all your full-timers, all part-timers, all workers in the same location, etc.) pays the same, regardless of individual health factors. The idea is not to “punish” those in a group for preexisting conditions, genetic propensity to disease, prior claims experience, or poor health habits.
But what about rewarding those who do live healthful lives, say, with lower premiums, copays, or deductibles? Can that be done?
HIPPA says yes. The law contains an important exception allowing you to institute a wellness program. However, to prevent employers from practicing “back door discrimination,” the plan must meet certain requirements. It is these requirements that have been updated.
Programs That Depend on Health Outcome
There are two sets of criteria to meet to utilize the wellness program exception. The first are involved if your program rewards participants for reaching a desired health outcome … giving up smoking or losing weight, for example, or carrying out a specified exercise regime. If an outcome is required, you must:
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–Limit the reward to no more than 20 percent of the cost of individual health coverage at your organization (even if the employee has a family plan).
–Design the program to promote health and prevent disease.
–Let people qualify for the program at least once a year.
–Make the reward available to all similarly situated individuals, and provide alternative ways to earn it for, say, individuals with disabilities. (One example: If the program requires a daily walk, people in wheelchairs could qualify by also following the route.)
–Disclose the availability of reasonable alternatives in all program materials.
… And Programs That Don’t
The second form of permitted wellness program has no requirement that a health outcome be met. These are the kinds of rewards permitted for this type of program:
–Reimbursement of part or all the costs of joining a fitness center.
–Diagnostic testing that offers a reward for taking the test, with that reward received regardless of test results.
–Waiver of deductibles or copays forpreventive care. The examples given are prenatal or well-baby visits for new mothers.
–Reimbursement of a quit smoking program, regardless of whether the smoker quits or not.
–A reward for attending a monthly health education seminar.
Either program will likely benefit you. “Wellness programs in the workplace are well worth exploring,” writes business law columnist and attorney James Jorgensen on the website NWI.com. “Success at almost any level should lower health-related costs, and a healthier work force is typically more productive and has a better attendance record.”
Jorgensen does offer one additional bit of advice. Check if there’s also state law on wellness programs, to keep your plan “legally healthy.” (BLR’s state-specific programs, What to Do About Personnel Problems in [Your State] and HR.BLR.com can help.)
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