HR Management & Compliance

Health Benefits: New HIPAA Nondiscrimination Rules for Wellness Programs

The U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) has published final rules regarding compliance with the nondiscrimination provisions of the Health Insurance Portability and Accountability Act (HIPAA) for wellness programs. The rules will be effective on the first day of the plan year beginning on or after July 1, 2007. For calendar year plans, the new rules generally apply beginning January 1, 2008.

HIPAA’s nondiscrimination provisions generally prohibit group health plans from charging similarly situated individuals different premiums or contributions or imposing different deductible, copay, or other cost-sharing requirements based on a health factor. Health factors include: health status, medical condition, claims experience, receipt of health care, medical history, genetic information, evidence of insurability, and disability.


Join us this fall in San Francisco for the California Employment Law Update conference, a 3-day event that will teach you everything you need to know about new laws and regulations, and your compliance obligations, for the year ahead—it’s one-stop shopping at its best.


The nondiscrimination rules, however, contain an exception that permits plans to offer wellness programs. In particular, 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 program participation is available to all similarly situated individuals). Examples of compliant programs include:

  • A program that reimburses all or part of the cost for memberships in a fitness center.
  • A diagnostic testing program that provides a reward for participation rather than outcomes.
  • A program that encourages preventive care by waiving the copayment or deductible requirement for the costs of, for example, prenatal care or well-baby visits.
  • A program that reimburses employees for the costs of smoking cessation programs without regard to whether the employee quits smoking.
  • A program that provides a reward to employees for attending a monthly health education seminar.

On the other hand, 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 HIPAA nondiscrimination provisions.


Additional Resources:

Final HIPAA Nondiscrimination and Wellness Program Rules

Leave a Reply

Your email address will not be published. Required fields are marked *