Staggering healthcare costs are making many employers want to move beyond passive wellness programs toward a more aggressive stance that demands healthy results, not mere participation. How far can you go? Today’s expert sorts it out.
Employers may make health demands, but only within certain strict limits, says Antoinette Plizner of the Ann Arbor, Michigan, law firm of Butzel Long, PC. Her comments appeared in our sister publication, the HR Manager’s Legal Reporter. Here are her answers to common questions about wellness:
Q. May we condition eligibility for healthcare benefits on health status?
A. No. ERISA prohibits a group healthcare plan from basing an employee’s eligibility to begin or continue participation, or the contribution required from an employee to participate in the plan, on health status-related factors. So you can’t charge smokers or those with high blood pressure, for example, more for their health insurance.
Q. May we require employee participation in a wellness program as a condition of obtaining group health plan coverage?
A. You can require a health assessment as long as you don’t see the results. In other words, you are just hoping that it will have a positive impact.
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Q. May we base required contributions on a participant’s health status?
A. ERISA generally prohibits a group healthcare plan from using a participant’s health status-related factors to determine the premium or contribution required. All similarly situated participants must be required to pay the same premium or contribution. However, see the next question and answer.
Q. May we reduce required contributions for participants in a wellness program?
A. The premium or contribution can be reduced if the participant complies with the requirements of a wellness program. Two types of wellness programs are permitted. There are different rules for each:
▪ Participation programs provide the reduced premium or contribution if the participant simply participates in the wellness program. The reduced premium or contribution is not conditioned on satisfying a standard related to a health factor. The amount of the premium or contribution reduction is not limited in this scenario.
Example: Your policy states that if an employee completes a health risk assessment and meets with a health coach twice a year, the employee’s required contribution or premium is reduced by 30 percent. This is fine as long as the employee receives the reduction whether or not there is any change in any of the employee’s health factors.
▪ Bona fide programs provide a reduced premium or contribution if the participant satisfies a standard related to a health factor upon completing the program. The amount of the premium or contribution reduction is currently limited to 20 percent of the cost of employee-only coverage under the group healthcare plan.
Example: A group health plan reduces a participant’s required premium or contribution by 20 percent of the cost of employee-only coverage if the participant’s body mass index is between 19 and 26 at the end of the preceding plan year.
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A Reasonable Alternative Standard
Participation programs must provide a reasonable alternative standard if a participant’s medical condition makes it unreasonably difficult or medically inadvisable to achieve the regular standard.
Any reward for participating in a bona fide wellness program that is not a reduction to the employee’s required contribution is not subject to the 20 percent restriction. However, to satisfy the Americans with Disabilities Act, the program must still comply with the alternative standard provision.
Any reduction in required contributions awarded to an employee under either type of wellness program is not taxable compensation to the employee.
Although the regulations reference co-pays as costs that could be reduced, they give no guidance as to how to calculate such reductions. As a result, most employers take the simple route and maintain a program of just reducing premiums.
In the next Advisor: how to calculate wellness ROI and an introduction to an all-new wellness system.
I agree that Wellness programs of HIPAA compliant but what are your takes on them not violating the ADA? I attached a clip from EEOC Enforcement Guidance on Disability-Related Inquiries and Medical Examinations of Employees Under the Americans with Disabilities Act (ADA), where it states to be ADA compliant a wellness program must be voluntary and to be voluntary it must not require participation nor penalize those who don’t….. Not getting a reduction in benefit would be a penalty in my view.
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22. May an employer make disability-related inquiries or conduct medical examinations that are part of its voluntary wellness program?
Yes. The ADA allows employers to conduct voluntary medical examinations and activities, including voluntary medical histories, which are part of an employee health program without having to show that they are job-related and consistent with business necessity, as long as any medical records acquired as part of the wellness program are kept confidential and separate from personnel records.(77) These programs often include blood pressure screening, cholesterol testing, glaucoma testing, and cancer detection screening. Employees may be asked disability-related questions and may be given medical examinations pursuant to such voluntary wellness programs.(78)
A wellness program is “voluntary” as long as an employer neither requires participation nor penalizes employees who do not participate.
I think companies can do alot. Wellness programs are one of the best ideas.
http://www.health-risk-assessments.com Wellness Programs