Carolyn Cox February 25, 2016 WELLNESS UPDATE -- INTERACTION BETWEEN HIPAA, ADA AND GINA

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1 Carolyn Cox February 25, 2016 WELLNESS UPDATE -- INTERACTION BETWEEN HIPAA, ADA AND GINA

2 Agenda Overview of HIPAA Obligations (including ACA changes) EEOC s proposed ADA wellness regulations EEOC s Proposed GINA Regulation Regarding Spousal HRA Other Miscellaneous Wellness Compliance Obligations

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4 Regulation of Wellness Programs

5 HIPAA / ACA Wellness programs historically permitted (under certain conditions) by HIPAA and applicable regulations - Wellness program not connected to a health plan is not subject to HIPAA rules - HIPAA distinguished between participation only and standard based programs - Participation only program need only be available to all similarly situated individuals - Standard based program had to meet five requirements, including a 20% limit on any reward offered

6 HIPAA / ACA ACA codified earlier HIPAA regulations with same basic structure, but some changes HIPAA, as amended by ACA, retained pre-aca distinction (with slightly different syntax) between participatory programs and health contingent programs

7 Participatory Program Participatory program is one that does not offer reward, or does not condition reward on satisfaction of a standard related to a health factor - Ex.: reimbursement of fitness center fee; participating in a smoking cessation program (whether or not successfully quit); reward for attending monthly health seminar; reward for completing a health risk assessment Participatory program is permissible so long as participation in the program is available to all similarly situated individuals No limit on reward (although as a practical matter employers generally have not offered significant financial reward for these programs)

8 Health contingent program is one that requires satisfaction of a standard to earn a reward - Two types Activity Only and Outcome Based ACA changes followed original HIPAA requirements for standard based programs with a few variations - Reward limit for health contingent programs increased to 30% of the cost of coverage, with an additional increase to 50% if additional percentage is in connection with program to reduce tobacco use - Broadened use of a reasonably alternative standard (RAS) for earning reward

9 Five requirements under ACA: Available annually Reward limited to 30% of the cost of coverage (up to 50% -- smoking) Reasonably designed to improve health Cannot be unduly burdensome, a subterfuge for discriminating based on a health factor or highly suspect in the method chosen to promote health or prevent disease

10 Uniformly available and allows reasonable alternative standard - Activity based program must provide RAS if it is unreasonably difficult or medically inadvisable to satisfy activity standard (if reasonable can seek medical certification of need for RAS) - Outcome based program must offer RAS regardless of whether it is unreasonably difficult or medically inadvisable - Also, if RAS is outcome based, must provide additional time to meet and individual must be given opportunity to comply with his/her personal physician s recommendation Availability of RAS must be disclosed in all written program materials

11 ADA Proposed Regulations Wellness programs subject to a number of different laws, and compliance with one does not mean compliance with all Different federal agencies have responsibility for (and enforcement authority over) various laws HIPAA overseen by HHS; ADA and GINA overseen by EEOC In past, EEOC stance on wellness programs less than clear Suggestion that financial incentives (even those OK under HIPAA) could render wellness program involuntary and/or violate GINA But no clear statements and little if any enforcement In 2013 statements, Commissioner suggested did not want to supplant HIPAA

12 April 2015, EEOC released proposed ADA regulations on wellness programs that include (i) disability-related inquires; and (ii) medical examinations (both implicate ADA) ADA regulations really focus on requirement that participation in wellness program be voluntary and what exactly it means to be voluntary

13 Under proposed regulations, voluntary means: Cannot require participation Definition of Voluntary Cannot deny coverage or limit coverage (except to extent of allowed incentives) for failure to participate No adverse action for failure to participate Clear notification to employees regarding information obtained Who receives it, how used, how protected etc.

14 To be considered voluntary, maximum incentive for employee is 30% of the total cost of self-only coverage, even if employee is enrolled in different tier and employee s spouse/dependents can participate in wellness; up to 50% for smoking if non-biometric assessment used (i.e., self-report) - Incentive limit does not apply to wellness programs that do not make disability related inquires (HRA) or use medical exam (biometric screen)? - HIPAA/ACC standard -- Maximum incentive is 30% of total cost of coverage in which individual enrolled (unless only employee can participate then 30% of self-only); up to 50% rule for smoking even if biometric

15 Program must be available to all and provide reasonable accommodation where required for employee with disability to access program (i.e., sign language interpreter for deaf employee to participate in health class)

16 ADA Underwriting Safe Harbor Under the EEOC s proposed regulations, denying an employee access to health benefits for failure to participate in a wellness program (or financial penalties exceeding the incentive limitation) would render a wellness plan involuntary and in violation of ADA Contrast ADA safe harbor language employer exempted from the ADA when administering the terms of a bona fide benefit plan based on underwriting risks, classifying risks or administering such risks Litigation over whether the safe harbor language trumps the EEOC s position that wellness programs must be voluntary

17 Flambeau, Inc. v. EEOC Wisconsin District Court Enrollment in employer s health plan conditioned on completion of a health risk assessment and biometric screening (participation only) EEOC challenged no health plan coverage if employee refused to participate (not voluntary) Employer argued program fell within ADA underwriting safe harbor and was therefore exempted from ADA EEOC argues the wellness voluntary requirement trumps underwriting safe harbor District court found for employer likely to be appealed

18 GINA includes two Titles Title I for health plans and issuers; enforced by DOL, HHS and Treasury Title II for employers; enforced by EEOC Genetic Information defined as: Genetic tests Genetic tests of a family member Information re: manifestation of a disease or disorder in family member (i.e., spouse s current medical conditions) Information re: genetic services requested or received GINA

19 Title I of GINA prevents health plan from: Adjusting cost based on genetic information Employee HRAs and GINA Requesting participants to undergo genetic tests Request, require or purchase genetic information for underwriting Plan cannot reward a participant for completing an HRA that requests genetic information (i.e., medical history, family medical history) Post GINA, HRAs changed to remove questions eliciting genetic information; focus on current health and health practices

20 Spousal HRAs Removing questions re health history solved problem for employee HRA Spousal HRA still a problem because employee rewarded for spouse s current medical info, which is considered the genetic information of an employee Therefore, under original GINA regs, no financial incentives for spousal HRAs (or biometric testing)

21 Example: Employer offers health plan to employees. Self-only coverage costs $6,000 per year and employee plus spouse coverage costs $13,000 per year. Employer offers HIPAA compliant wellness program that provides premium incentive of 30% of the cost of coverage for employees and spouses who complete wellness program, which includes a HRA that asks about current medical conditions. Under wellness program, employee Jane and her husband John are each eligible for a wellness incentive of $1,950 ($3,900 total) if they complete the program. Under previous EEOC position, this wellness incentive violates GINA because provides a financial incentive to the employee based on her spouse John s completion of an HRA Could reward employee for completion of HRA that asks only about employee s current medical conditions, but cannot reward employee based on spouse s completion of HRA

22 GINA Title II NPRM Clarifies that GINA does not prohibit the use of financial incentives for a spousal HRA when offered in connection with a wellness plan if: The spouse is enrolled in the group health plan The program is reasonably designed The incentives qualify as limited inducements The spouse gives prior, knowing and voluntary written authorization (authorization form must reference GINA s protections) NOTE: As used in NPRM, an HRA encompasses both questionnaires and biometric tests

23 HRA use allowed only in connection with the wellness component (can never ask for genetic information in connection with underwriting, eligibility, cost etc.) Under Title II (applicable to employer conduct in the workplace), employer cannot request or incentivize for other purposes As with HIPAA, needs to be a firewall between employer acting as sponsor of the health plan, and employer acting as the employer

24 GINA Reasonably Designed Reasonably designed = program has a reasonable chance of improving the health of, or preventing disease in, participating individuals Must not be: Overly burdensome Subterfuge for discrimination Cannot exist merely to shift costs to targeted employees based on their health Cannot collect information without providing any follow-up information or advice

25 GINA Voluntary Total inducement to the employee and spouse may not exceed 30% of total annual cost of the coverage in which employee and spouse are enrolled Total inducement for the employee cannot exceed 30% of self-only coverage (like ADA regs) Inducement to spouse limited to 30% of cost of plan in which spouse enrolled minus 30% of cost of self-only No incentives may be offered to spouse for his/her own genetic information

26 GINA Additional Rules Per earlier slide, cannot request spouse s OWN genetic information Cannot use inducements with respect to child HRAs, or request genetic information of a child Does not change absolute prohibition against the use of genetic information in making employment decisions Cannot condition participation in wellness program on waiving GINA s confidentiality provisions

27 Other Misc. Compliance Issues IRS cash rewards and gift cards are taxable as are in-kind gifts (unless di minimus) Employee receives a $50 gift card or Fitbit for completing a HRA in IRS view both are taxable income to employee If wellness plan provides medical care (biometric screening, physical examination, flu shots) it is considered a health plan that is subject to ERISA and COBRA If wellness plan provides a discount on health premiums (even if no medical care) subject to ERISA Wellness plan connected with group health plan can be wrapped into ERISA and COBRA compliance for group health plan

28 Utilize Our Wellness Consultants Can help you tailor program to your workforce (always need to consider your culture) Provide assistance in developing a comprehensive wellness strategy Pete Arens (801) parens@moreton.com Ashley Kearl Poore (801) apoore@moreton.com

29 Utah Worksite Wellness Conference Next week Thursday, March 3rd Great opportunity to learn the latest on Wellness Moreton & Company will be attending and Pete will be presenting Earn HRCI credits

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31 Questions?