According to the Wellness Councils of America, more than 81% of businesses with 50 or more employees have some form of health promotion program to help offset the rising costs of health care. Company-sponsored wellness programs, however, must be carefully structured to comply with both state and federal law. Common issues that can arise include reasonable accommodation, nondiscrimination, confidentiality and protection of off-duty conduct. As a result, it is essential to enlist a trusted resource who will stay on the front lines of health care reform and make sure you stay compliant in all aspects of your wellness program.
For the purposes of this article, the focus will be on HIPAA Compliance as it specifically pertains to workplace wellness. HIPAA commonly prohibits discrimination based on health status. There are generally two types of wellness programs (1) participation only and (2) standard-based.
Participation Only Programs
These programs reward or penalize participants solely for participating (or not), regardless of outcome. HIPAA imposes few requirements on these types of programs other than that they be made available to all individuals within an organization. Examples include:
- Reimbursement for a gym membership
- Waiver of copayment/deductible for preventive care visits
- Smoking cessation programs that do not condition reimbursement on outcome
Standard-based programs reward or penalize based on the participants’ ability to meet a certain standard or goal. HIPAA imposes additional requirements on these programs, such as:
1. The premium differential cannot exceed 20% of the cost of employee-only coverage under the plan (increasing in 2014 to at least 30%).
2. The program must be reasonably designed to promote health or prevent disease and meets this requirement if:
- There is a reasonable chance of improving the health of, or preventing disease in, those who are participating
- It is not overly burdensome
- It is not a maneuver for discrimination based on a specific health factor
- It is not highly suspect in the method chosen to promote health or prevent disease
3. Individuals must be given the opportunity to achieve the award or avoid the penalty at least one time per year.
4. The reward must be offered to all individuals within the organization. The wellness program can, however, distinguish between employees and their dependents, as well as provide different rewards based on the benefits package the individual chooses or on bona fide employment-based classification consistent with their usual business practices (i.e. full-time versus part-time, union versus non-union, etc.).
5. All plan materials describing the wellness program must also include reasonable alternatives for those individuals who are not able to participate or meet the standards required for the reward because of a medical condition and/or limitation.
It’s imperative to remember that if your program is standard-based and an individual cannot meet the offered wellness program criteria because it is medically inadvisable or unreasonably difficult due to a medical condition, then the individual must be offered a reasonable alternative. It is permissible to require verification, such as a doctor’s note.
While this scratches the surface of wellness program compliance, Assurance has dedicated resources to help you through rules and regulations every step of the way.