WELLNESS PROGRAMS LEGAL CONSIDERATIONS SEPTEMBER 11, 2013

Transcription

1 Presents WELLNESS PROGRAMS LEGAL CONSIDERATIONS SEPTEMBER 11, 2013 Felicia Finston, Wilkins Finston Law Group LLP Jackie Middleton, University of Colorado Hospital

2 WHAT IS A WELLNESS PROGRAM? Any program designed to promote health or prevent disease. Examples: Health risk assessments or biometric screenings Disease management programs Smoking cessation programs BMI/weight loss programs Slide No. 2

3 LAWS THAT MAY IMPACT WELLNESS PROGRAMS Patient Protection and Affordable Care (PPACA), Health Insurance Portability and Accountability Act (HIPAA), Employee Retirement Income Security Act (ERISA), Consolidated Omnibus Budget Reconciliation Act of 1983 (COBRA), Genetic Information Nondiscrimination Act (GINA), Americans with Disabilities Act (ADA), Age Discrimination in Employment Act (ADEA), Title VII of the Civil Rights Act of 1964 (Title VII), National Labor Relations Act (NLRA), Internal Revenue Code, and State Laws. Slide No. 3

4 LEGAL/POLICY CHALLENGES APPLICABLE TO WELLNESS PROGRAMS Multiple laws and agencies regulate the same activities. Blurred line between encouraging health lifestyles and mandating employee behavior. Unanswered questions by regulatory agencies. Impact of health care reform. Slide No. 4

5 TWO BASIC TYPES OF WELLNESS PROGRAMS Programs that are part of an employee benefit plan under ERISA: Often part of a group health plan ("GHP") (e.g., employee gets a discount on health coverage premiums for certain wellness activities or achievements). ERISA may preempt state law. Programs that are not part of an ERISA employee benefit plan: Activities and reward not tied to employee benefit plan. Employment policy separate from health/benefit plan. May be subject to certain state laws (e.g., laws protecting lawful off-duty conduct of employees). Slide No. 5

6 PPACA Codifies HIPAA guidance regarding wellness programs for plan years beginning on and after January 1, Also contains various provisions dealing with wellness: PPACA 1001 concerning reporting requirements for GHPs. PPACA 1201 extends prohibitions against discrimination on the basis of health factors to the Public Health Services Act. PPACA 4303 dealing with grants for employer-based wellness programs. PPACA concerning workplace wellness grants. Slide No. 6

7 HIPAA Applies to wellness programs that are part of a GHP. Can t discriminate against similarly situated individuals on the basis of a health factor (e.g., can t vary premiums, deductibles or copayments). BUT Exception for Wellness Programs. Slide No. 7

8 HIPAA NONDISCRIMINATION PROVISIONS Regulations provide two sets of rules depending on whether reward is based on satisfaction of a standard related to a health factor (i.e., outcome vs. participation). Outcomes such as maintaining a certain BMI or cholesterol level or refraining from smoking would generally be considered a health factor. Participation such as attending a smoking cessation program or completing a health risk assessment (without regard to the results of either) would generally not be considered a health factor. Slide No. 8

9 HIPAA WELLNESS PROGRAM REQUIREMENTS Participation only programs comply with HIPAA so long as program is available to all similarly situated employees. Examples include: Programs that reimburse all or a part of the cost of gym memberships. Programs that reimburse costs of smoking cessation programs (irrespective of whether employee stops smoking). Programs that provide an award for attending a monthly education seminar. Slide No. 9

10 HIPAA WELLNESS PROGRAM REQUIREMENTS (Cont d) Health-Contingent Wellness Programs those that require individual to satisfy a standard related to a health factor. Two Types: Activity-Only Wellness Programs walking, diet or exercise programs. Outcome-Based Wellness Programs Not smoking, reaching a specific BMI etc. Part I typically has initial screening test Part II typically targets individuals who don t meet standard with additional programs Slide No. 10

11 HIPAA WELLNESS PROGRAM REQUIREMENTS (Cont d) Wellness programs that base a reward on a standard related to a health factor must satisfy the following 5 requirements: Opportunity to qualify 1 x year Size of Reward 30% of cost of employee coverage (or family coverage if dependents may participate). 50% tobacco cessation. Reasonable Design - To promote health or prevent disease Outcome-based must provide alternative standard to anyone who doesn t satisfy initial health metric. Slide No. 11

12 HIPAA WELLNESS PROGRAM REQUIREMENTS (Cont d) Uniform Availability and Reasonable Alternative Standard Must be available to all similarly situated individuals (allow reasonable standard or waive the standard) Reasonable alternative standard need not be determined in advance Full reward must be uniformly available even if an alternative standard is satisfied later during the year If wellness standard is not medically appropriate must provide standard that accommodates recommendation of an individual s personal physician Slide No. 12

13 HIPAA WELLNESS PROGRAM REQUIREMENTS (Cont d) Notice of Availability of Reasonable Alternative Standard Must be disclosed in all plan materials describing terms of healthcontingent program Must provide contact information for individuals to request reasonable alternative standard Sample language provided in final regulations Slide No. 13

14 GINA GINA prohibits group health plans from requesting, requiring or purchasing genetic information prior to or in connection with enrollment, or at any time for underwriting purposes. "Genetic Information" for purposes of GINA includes family medical history. Underwriting purposes includes most "rewards" under a group health plan. Discounts, payments in kind, rebates, or other premium differentials. Changing deductibles or cost-sharing mechanisms. Participation in disease management. Slide No. 14

15 GINA AND HEALTH RISK ASSESSMENTS (HRAs) HRAs often ask about family medical history. After GINA, group health plans can no longer provide "rewards" for completing an HRA that requests genetic information. Structure HRAs to comply with GINA - Do not ask questions about family medical history or genetic testing. Do not ask open-ended questions that could result in receiving genetic information unless HRA indicates that participants should not provide genetic information. If an HRA requests genetic information, do not use the plan to provide a reward for its completion. Slide No. 15

16 GINA'S WELLNESS PROGRAM EXCEPTION The employment provisions of GINA contain an exception for wellness programs. Does not really help with the underwriting issue. Employer can request genetic information if: Health or genetic services are offered by the employer, Employee provides knowing, voluntary, written authorization, Only the employee (or family member) and health care professional or genetic counselor receive individually identifiable information concerning the results and only for purposes of the services, and Employers only receive information in the aggregate that does not disclose identities. Slide No. 16

17 ADA ISSUES WITH WELLNESS PROGRAMS ADA generally prohibits discriminating against a qualified individual with a disability in employment, compensation and other terms, conditions, or privileges of employment (including employee benefits). Prohibition on discrimination includes medical exams and inquiries. Limitations on employer's ability to make disability-related inquiries or request medical examinations, must be: job-related and consistent with medical necessity Disability is broadly defined. Threatens HRAs and "biometric screenings." Slide No. 17

18 ADA AND VOLUNTARY WELLNESS PROGRAMS Exception is made for voluntary wellness programs. A program is voluntary if the employer - Does not require participation, and Does not penalize employees who do not participate. This interpretation of "voluntary" leaves a lot of unanswered questions. Slide No. 18

19 CONCERNING INFORMAL EEOC GUIDANCE In 1998, the Equal Employment Opportunity Commission (EEOC) questioned whether providing monetary incentives for participation might make a wellness program involuntary. The EEOC has indicated that HIPAA compliance does not mean ADA compliance. In 2009, the EEOC indicated that conditioning employer health coverage on completing an HRA and a few screening tests violated the ADA. The EEOC later officially withdrew the portion of the letter that indicated that a program would be "voluntary" if the participation incentive did not exceed the 20% cost differential allowed under HIPAA. Slide No. 19

20 BONA FIDE BENEFIT PLANS SAFE HARBOR ADA does not prohibit an employer from maintaining a bona fide benefit plan the terms of which are based on underwriting risks, classifying risks or administering such risks that are based on or not inconsistent with state law. Exemption stands even if plan imposes limits on persons with disabilities. Purpose is to permit development and administration of benefit plans in accordance with standard principles of risk assessment. In Seff v. Broward County (Florida), the Court found wellness program that imposed $20 per paycheck surcharge on employees who declined to participate in wellness program s health questionnaire and biometric screening did not violate ADA. Not binding on the EEOC or other circuits but may provide an alternative basis for defending wellness programs. Slide No. 20

21 COBRA AND ERISA CONSIDERATIONS COBRA Implications Is part of the wellness program a GHP (i.e., does it provide medical care)? EAP that provides counseling services, is probably a GHP subject to COBRA. Conversely, referral only EAP is likely not a GHP. ERISA Implications Is part of the wellness program an ERISA plan? Reporting and disclosure requirements. Slide No. 21

22 ADEA Prohibits discrimination against persons over age 40 in terms and conditions of employment (including employee benefits) because of age. Wellness programs which have a disparate impact on older employees may violate ADEA (e.g., programs based on satisfaction of a health standard that is more difficult for older employees to meet). Slide No. 22

23 TITLE VII Title VII prohibits an employer from discriminating against any individual with respect to hiring or the terms and conditions of employment based on race, color, religion, sex or national oaring. A wellness program that results in disparate treatment or disparate impact on a protected class may violate Title VII. Some studies have suggested that individuals of certain races, national origins, or genders may be predisposed to certain medical conditions (e.g., high blood pressure). If lower health premiums are conditioned on meeting certain standards related to a health factor (e.g., maintaining blood pressure within a certain range), this could be problematic. Slide No. 23

24 NLRA Health benefits are generally a mandatory subject of bargaining. Depending on how a wellness program is structured, the types of benefits offered, etc. it may be deemed a health benefit. Thus, if the employer is subject to a collective bargaining agreement, it may be necessary to negotiate certain aspects of the wellness program. Slide No. 24

25 INTERNAL REVENUE CODE Rewards and Incentives Health-related rewards, such as reduced deductibles or contributions to a health reimbursement arrangement, are generally not taxable income for federal tax purposes. Cash (including gift cards) and other property or services will generally be taxable income and subject to withholding and employment taxes for federal income tax purposes unless "de minimis." Cafeteria Plans Consider how premium discounts or employee contribution rebates may impact compliance with section 125 of the Internal Revenue Code. Recognize contributions to employee Health Savings Accounts must satisfy strict comparability rules or be provided through a section 125 plan. Slide No. 25

26 STATE LAWS Wellness program may have different state income tax implications on employees. State insurance law may prohibit certain types of wellness incentives. Other state laws may apply if there is no ERISA preemption. Wellness programs that are not part of a group health or other ERISA plan Governmental plans Church plans. Examples of potentially applicable state laws: State law concerning employment discrimination. State law protecting smokers. State law protecting employees engaging in otherwise lawful activities off the job site. Slide No. 26

27 Slide No. 27 QUESTIONS?