Designing a Compliant Wellness Program

Transcription

1 Designing a Compliant Wellness Program Presented by Howard Bye-Torre, Attorney, Stoel Rives Carol Wilmes, Director, Member Pooling Programs, Association of Washington Cities AGRiP 2017 Fall Educational Forum October 2, 2017

2 TODAY S TOPICS Health Insurance Portability and Accountability Act ( HIPAA ) Americans with Disabilities Act ( ADA ) Genetic Information Nondiscrimination Act ( GINA ) Federal income tax issues 2

3 WELLNESS PROGRAMS No single legal definition of wellness program Reasons to adopt wellness programs Improve participant health Boost workforce morale Reduce costs of employer health plans Assist employees in becoming better health care consumers Countervailing federal law Prohibits discrimination against individuals who are dealing with sickness, disability, or addiction 3

4 GROUP HEALTH PLANS AND WELLNESS PROGRAMS Applicability of some federal rules depend on whether wellness program is part of or is itself a group health plan ( GHP ) GHP: employee welfare benefit plan that provides or pays for medical care Separate GHP: free flu shots offered to all employees, even those not in major medical plan Part of GHP: lower premiums for employees who do not use tobacco Not GHP or part of GHP: employer pays cost of gym memberships 4

5 HIPAA AND WELLNESS PROGRAMS HIPAA prohibits a GHP from discriminating based on health status Physical or mental condition, medical history, genetic information, disability Exceptions to HIPAA s nondiscrimination rules Stand-alone dental or vision plans, certain EAPs Wellness programs that are not GHPs or not part of a GHP Wellness programs that satisfy HIPAA rules 5

6 THREE TYPES OF HIPAA WELLNESS PROGRAMS HIPAA distinguishes among 3 types of wellness programs that are GHPs or part of a GHP Participatory Health contingent activity-only Health contingent outcome-based Separate HIPAA rules for each type of program Maximum reward for participation (use reward rather than penalty ) Type of accommodations that program must offer Notice requirements 6

7 HIPAA: PARTICIPATORY PROGRAMS Definition of participatory wellness program No reward for participation in program; or Reward not conditioned on satisfaction of a health standard Mere completion of a health risk assessment ( HRA ) and/or a blood screening earns a reward One requirement under HIPAA: participatory programs must be available to all similarly situated individuals regardless of health status No limit on reward 7

8 HIPAA: HEALTH CONTINGENT PROGRAMS Health contingent wellness programs Activity-only: reward conditioned on completion of activity relating to health factor, regardless of outcome Examples: walking or other exercise programs Outcome-based: reward conditioned on achieving certain health outcome Examples: reward for not using tobacco or reward for having acceptable blood pressure or cholesterol readings 8

9 HIPAA: ACTIVITY-ONLY PROGRAMS Activity-only programs nondiscriminatory if Reasonably designed Reward available at least once per year Incentive capped at 30% (50% if tobacco-related) Reasonable alternative standard ( RAS ) offered to those for whom participation is Medically inadvisable; or Unreasonably difficult due to medical condition Notice: all materials describing program must describe RAS 9

10 HIPAA: OUTCOME-BASED PROGRAMS Outcome-based programs nondiscriminatory if Reasonably designed Made available at least once per year Incentive capped at 30% (50% if tobacco-related) RAS for anyone who does not meet the initial standard to get reward/avoid penalty Tobacco: must offer and pay for cessation program and make reward available for anyone who completes programs, even if persons doesn t quit Notice: all materials describing program must describe RAS 10

11 EEOC WELLNESS PROGRAM RULES EEOC issued final regulations under the ADA and GINA ADA Title I generally applies to private and state and local governmental employers with at least 15 employees GINA Title I applies to GHPs GINA Title II generally applies to private and state and local governmental employers with at least 15 employees Codifies positions taken by EEOC in litigation Under attack in courts (see later slide) 11

12 WELLNESS PROGRAM RULES: SCOPE ADA Title I prohibits: discrimination on basis of disability in terms, conditions, or privileges of employment most disability-related inquiries ( DRIs ) and medical examinations ( MEs ) that are not job-related and consistent with business necessity GINA generally prohibits GHPs and employers from requesting, requiring, or purchasing genetic information Both contain exception for voluntary wellness program Final rules indicate no ADA bona fide benefit plan safe harbor if wellness program has DRIs or MEs Courts have not always agreed with this EEOC position 12

13 WELLNESS PROGRAM RULES: SCOPE (CONT.) ADA and GINA rules generally effective in 2017 ADA applies when a wellness program involves DRI and/or ME without regard to whether part of or under a GHP GINA applies when a wellness program collects genetic information about an employee Employee s genetic tests Genetic information about employee or their family Manifestation of disease or disorder in employee s family (including family medical history) Family is defined to include one s spouse and children (adopted or biological) 13

14 #1: MUST BE REASONABLY DESIGNED TO PROMOTE HEALTH OR PREVENT DISEASE Like HIPAA: based on all facts and circumstances Not reasonably designed under ADA and GINA if it: - Collects health information without sharing results/advice with employee to promote health or prevent disease unless information used to design program that addresses health conditions identified - Exists primarily to estimate future health costs or to shift those costs onto employees with health issues Not reasonably designed under GINA if it penalizes employee because spouse cannot achieve health standard 14

15 #2: MUST BE VOLUNTARY Cannot deny coverage under GHP, or under a particular benefit package or medical service, due to nonparticipation in wellness program Example: cannot have benefit option with lower cost-share and deductibles conditioned on wellness activities Cannot condition incentive or participation in program on employee s agreement to Waive confidentiality of medical information Sell, transfer, or otherwise disclose information Must comply with incentive caps (later slides) 15

16 #2: MUST BE VOLUNTARY (CONT.) Under ADA: Cannot take adverse employment action against employee within meaning of the ADA due to nonparticipation Cannot require participation or penalize nonparticipation Under GINA: Cannot require disclosure of genetic information Must obtain prior knowing, voluntary, and written authorization to disclose genetic information Cannot retaliate against employee due to spouse s refusal to complete HRA or biometric screen under new spouse incentive rule 16

17 #3: CONFIDENTIALITY Under ADA, medical information can only be shared with employer in non-specified, aggregate terms that do not disclose, and are not likely to disclose, employee identities (except as needed to administer wellness program) Under GINA, genetic information can only be shared with employer in non-specified, aggregate terms that do not disclose individual identities (except as needed to administer wellness program) 17

18 #4: NOTICE TO EMPLOYEES (ADA) Separate from notice required under HIPAA May combine with HIPAA notice or draft custom notice, but must comply with content required under rules Must describe Medical information to be obtained How it will be used Who will use/receive it Restrictions on disclosure Methods to prevent improper disclosure (including whether HIPAA privacy/security rules apply) Must be issued to employees before they participate; illegal to wait until after they complete DRI or ME 18

19 #5: COMPLY WITH INCENTIVE CAPS (ADA) Under ADA, employee incentive cannot exceed 30% of the total cost of self-only coverage, without regard to whether it is part of or under GHP Participation in Wellness Program Only employees enrolled in employer s GHP can participate All employees can participate, regardless of enrollment in employer s GHP All employees can participate, but employer does not sponsor GHP EEOC Incentive Cap 30% of total cost of employee-only coverage option under plan in which employee enrolled (even if employee enrolled in another coverage tier) 30% of total cost of lowest-cost, employee-only coverage option under employer s GHP 30% of total cost of self-only coverage under second lowest cost Silver Plan for 40-year-old non-smoker at Marketplace in the state employer identifies as its principal place of business 19

20 #5: COMPLY WITH INCENTIVE CAPS (GINA) Under GINA, generally cannot offer incentive for genetic information about employee, spouse, or child (adopted or biological, regardless of age) except for new spouse incentive rule Can offer incentive to complete HRA or biometric screen that includes questions about family medical history or other genetic information, if clearly stated that incentive will be rewarded without regard to whether such information is disclosed 20

21 NEW SPOUSE INCENTIVE RULE UNDER GINA Can offer incentive for employee and spouse to complete HRA or biometric screen that collects information about spouse s manifestation of disease or disorder (e.g., BP, cholesterol, glucose, heart disease, diabetes), if: Spouse provides prior knowing, voluntary, written authorization on requisite authorization form HRA or biometric screen administered in connection with spouse s receipt of health/genetic services (e.g., through reasonably designed wellness program) Spouse s incentive meets incentive cap Employee s incentive meets incentive cap 21

22 #5: COMPLY WITH INCENTIVE CAPS (GINA) In addition to the employee incentive cap, the spouse s incentive cannot exceed... 30% of the total cost of self-only coverage of the GHP in which the employee is enrolled. 30% of the total cost of self-only coverage under the employer s GHP. 30% of the total cost of the lowest-cost, self-only coverage under the employer s major medical GHP. 30% of the total cost of self-only coverage under the second lowest-cost Silver Plan for a 40-year-old non-smoker at the Marketplace in the state the employer identifies as its principle place of business. When... enrollment in the plan is a condition for participation in the wellness program. the employer offers one GHP, but participation in the wellness program does not depend on the employee s or spouse s enrollment in that plan. the employer offers more than one GHP, but enrollment in a particular plan is not a condition for participation in the wellness program. the employer does not offer a GHP or group health insurance coverage. 22

23 PROVIDE REASONABLE ACCOMMODATIONS UNDER ADA Absent undue hardship, employers must reasonably accommodate a request from an employee with a disability to enjoy the benefits and privileges of their employment This includes the ability to get a reward, or avoid a penalty, under the employer s wellness program **ADA s reasonable accommodation standard is not the same as HIPAA s reasonable alternative standard** 23

24 AARP LEGAL CHALLENGE TO ADA/GINA RULES AARP challenged EEOC s finding that wellness programs were voluntary under ADA and GINA if the programs did not exceed maximum 30% incentive level DC District Court found EEOC s finding to be arbitrary and capricious Remanded to EEOC for reconsideration without vacating the regulations AARP has filed motion asking that the regulations be vacated by January 1,

25 FEDERAL INCOME TAX ISSUES Wellness incentives providing health benefits usually are not taxable Examples: biometric screen; discount on deductibles Wellness incentives providing non-health benefits usually are taxable Examples: gift cards; gym membership dues 25

26 Sharing Wellness Compliance Information to Pool Members

27 Association of Washington Cities Employee Benefit Trust Member service of AWC Member Driven Pool o Board of Trustees o Employee Benefits Advisory Committee 270+ participating entities 16,000 employees 36,000 lives

28 Health Management Programs & Service

29 Wellness Compliance is a Priority For the Trust & For the Member Employers Legal updates at Annual Worksite Wellness Conference Legal analysis Trust Member Employers Webinars

30 Jumping Through the Hoops of Wellness Program Legal Compliance Association of Washington Cities Wellness Webinar July 19, 2016

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36 Questions? Howard Bye-Torre (206)