«© 2016 GALLAGHER BENE FIT SERVICES, INC. Table of Contents SECTION 1 – INTRODUCTION SECTION 2 – DETERMINING WELLNESS PROGRAM TYPE SECTION 3 – ...»
Guide for Designing
© 2016 GALLAGHER BENE FIT SERVICES, INC.
Table of Contents
SECTION 1 – INTRODUCTION
SECTION 2 – DETERMINING WELLNESS PROGRAM TYPE
SECTION 3 – SUMMARY OF POTENTIALLY APPLICABLE KEY LAWS
SECTION 4 – GENERAL EDUCATIONAL & PARTICIPATION-ONLY PROGRAMS THAT ARE
NOT HEALTH PLAN-RELATED
SECTION 5 – HEALTH PLAN-RELATED PARTICIPATION-ONLY PROGRAMS
SECTION 6 – HEALTH PLAN-RELATED ACTIVITY-ONLY PROGRAMS
SECTION 7 – HEALTH PLAN-RELATED OUTCOME-BASED PROGRAMS
We share this information with our clients and friends for general informational purposes only. It does not necessarily address all of your specific issues. It should not be construed as, nor is it intended to provide, legal advice. Some of the specific guidance within this Gallagher Benefit Services, Inc. Discussion Guide is based on informal March 2016 © 2016 GALLAGHER BENE FIT SERVICES, INC.
SECTION 1 – INTRODUCTION The rules described in the following pages are based on the final HIPAA (as amended by PPACA) regulations issued in June 2013. In April 2015, the EEOC issued proposed regulations on wellness programs under the ADA, and in October 2015 the EEOC issued proposed regulations on wellness programs under GINA. We include both of those proposed regulations in blue italic font.
Wellness programs come in many different shapes and sizes and may be called something other than a wellness program. These programs may provide very limited benefits such as educational health-related information, or they may be more extensive and involve biometric testing, individualized coaching, or even be part of a disease management program. Knowing what type of program you have is important because which federal laws apply (or don’t apply) is largely determined by the type of program. There are
four common types of employer-sponsored wellness programs:
1. General educational or participation-only & not health plan-related
2. Participation-only & health plan-related
3. Activity-only & health plan-related
4. Outcome-based & health plan-related In describing wellness programs, we refer to rewards that many programs provide for employees who participate in the program or achieve certain outcomes. For example, an employee who completes a health risk assessment questionnaire may receive a 5% reduction in required health plan contributions.
Other wellness programs use penalties rather than rewards. For example, a wellness program may include a 10% smoker surcharge. Regulators have made it clear in the regulations that the same rules apply to both rewards and penalties. We use the word “reward” in this discussion guide to include both a positive incentive (reward) and a disincentive (penalty or no reward).
Type 1 – General Educational or Participation-only and not Health Plan-Related
General educational or informational programs are designed to provide general health information to employees and sometimes their families. They are voluntary programs that just make information available without requiring the employee to access the information or engage in an activity. These programs are general in nature – they are not individualized and do not provide any medical care.
Participation-only programs that are not health plan-related are designed to promote healthy lifestyle choices among employees and sometimes family members, but they go beyond just providing information. They include some type of health-related activity, but are either purely voluntary with no reward or have a reward that is not tied to a health plan.
The good news for these types of plans is that they are subject to fewer federal employment and benefits laws.
Type 2 – Health Plan-Related Participation-Only Programs These programs are participation-only since they require participation in a health related activity, but don’t tie the reward to the results of participation. They are health plan-related since they are limited to PAGE 1 | © 2016 GALLAGHER BENE FIT SERVICES, INC.
employees enrolled in the employer’s health plan. Several federal employment and benefits laws apply to these types of programs with more requirements applicable to programs that involve provision of health care (such as a biometric screening).
Type 3 – Health Plan-Related Activity-Only Programs-Based Programs
These programs are activity-only since they require the individual to complete a specific activity in order to receive the reward. They are health plan-related since they only apply to individuals enrolled in the employer’s health plan. Additional federal employment and benefits laws apply to these types of programs.
Type 4 – Health Plan-Related Outcome-Based Programs
These programs base the reward on either the existence of a particular health condition or the results of a test such as a biometric screening and the reward is tied to participation in a health plan. These programs are outcome-based since they require the individual to satisfy a health-related standard in order to receive the reward. They are health plan-related since they only apply to employees enrolled in the employer’s health plan. Additional federal employment and benefits laws apply to these types of programs. Rules for these programs – especially under HIPAA and PPACA – are more stringent than for other types of wellness programs.
Determining Wellness Program Type and Rules
In the sections that follow we review the rules as they apply to these common types of wellness programs.
Section 2 includes a questionnaire that may help you to determine which type of wellness program you have in place (or are considering implementing). Rules for general educational programs along with participation-only programs that are not related to the employer’s health plan are discussed in section 4.
Health plan-related programs are discussed in sections 5 through 7 with participation-only programs in section 5, activity-only in section 6, and outcome-based in section 7. Each of these three sections is designed to operate on a stand-alone basis. For example, section 4 describes the rules that apply to an educational program or a participation-only program not related to the employer’s health plan, but doesn’t include the rules that apply to other types of wellness programs. Section 5 covers the rules for activityonly programs. As a result, an employer with a health plan-related wellness program that is participationonly need only review the rules in section 5.
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SECTION 2 – DETERMINING WELLNESS PROGRAM TYPEThe questionnaire below is intended to help you determine which type of wellness program (or programs) you have in place or are considering implementing.
NOTE: Wellness programs designed to reduce tobacco use are generally outcome-based programs. If the program provides a reward for attending a smoking cessation class regardless of whether the individual does not smoke or stops smoking, it would be participation-only.
Otherwise, it is probably outcome-based. Section 7 covers the rules for outcome based wellness programs.
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SECTION 4 – GENERAL EDUCATIONAL & PARTICIPATION-ONLY
PROGRAMS THAT ARE NOT HEALTH PLAN-RELATEDGeneral educational programs that are designed to provide general health-related information to employees (and sometimes family members) are considered to be participation-only programs, unrelated to the health plan. They are voluntary and just make health information available. Participation-only programs are designed to promote healthy lifestyles and healthy choices, but not provide individualized health care. Some participation-only programs are purely voluntary with no rewards. Others have a reward for participation, but the reward is not related to the employer’s health plan and the wellness program itself is not a health plan.
EDUCATIONAL WELLNESS PROGRAMSThese programs just provide general health information to employees and often family members. They are purely voluntary with no requirement to participate and no reward. Examples of educational and
Workplace posters with tips on how to avoid catching a cold or getting the flu • Newsletters on the benefits of healthy eating or regular exercise • Lunch-n-learn sessions on health-related topics • Healthy food choices in vending machines and/or the cafeteria • Since these programs are limited, they are generally subject to few federal requirements.
PARTICIPATION-ONLY PROGRAMS THAT ARE NOT HEALTH PLAN-RELATEDThese programs do more than just provide general health-related information. They involve participation on the part of employees, and in some cases family members. They either do not provide a reward or provide a reward that is not related to an employer’s health plan and the wellness program itself is not a health plan.
Examples of participation-only programs that do not have a reward:
An exercise bicycle or treadmill available for employee use during lunch or other work breaks • A walking program at lunch time that employees are free to join (or not join) • Health coaching, exercise plan or healthy eating plan (by non-healthcare professional) •
Examples of participation-only programs that provide a reward:
A T-shirt for attending an educational class or seminar • A $25 gift card for attending a smoking cessation class • A $50 gift card for completing a health risk assessment questionnaire that is offered to employees • regardless of whether or not the employee is eligible for the health plan. It could be open to all employees, all full-time employees, or all employees at a specified location Reimbursement of some of the cost of a health club or gym membership regardless of whether or • not the employee is eligible for your health plan PAGE 7 | © 2016 GALLAGHER BENE FIT SERVICES, INC.
A $100 gift card for the winner of a “biggest loser” contest • Note: Under April 2015 proposed EEOC regulations, if a health risk assessment includes any disabilityrelated inquiries, then it would be subject to ADA requirements for wellness programs. Generally, those requirements as proposed are: (1) the plan must be reasonably designed; (2) the maximum reward may not exceed 30% of the employee-only cost of coverage; (3) the plan must be voluntary; (4) the plan must be accessible by individuals with disabilities; (5) information must be kept confidential; and (6) employees must receive a notice describing the uses and disclosures of health information obtained by the wellness program. See page 10 for more detailed information.
WELLNESS PROGRAMS AS HEALTH PLANS
Some wellness programs include services that qualify as “medical” care and may need to comply with additional requirements. A wellness program involves “medical care” if the care is individualized and provided by trained professionals. “Medical care” is defined to mean amounts paid for: (a) the diagnosis, cure, mitigation, treatment, or prevention of disease, or amounts paid for the purpose of affecting any structure or function of the body, (b) amounts paid for transportation primarily for and essential to medical care referred to in (a), and (c) amounts paid for insurance covering medical care referred to in (a) and (b). Because wellness programs are designed to prevent disease, they are often programs that provide individualized medical care. For example, flu shots, health coaching by a nurse, counseling by a therapist, or biometric screening would all be examples of medical care. A program that provides a newsletter with health related articles, a “lunch-n-learn” about diabetes, or a weight loss class without a personalized assessment would be informational rather than individualized medical care. Many employers who sponsor a wellness program that includes individualized medical care will link the wellness program to their health plan (usually major medical plan). For example, the reward might be a reduction in a medical deductible or an increase in a required medical plan contribution (penalty).
Other employers have a wellness program that is not tied to a health plan such as a major medical plan.
The wellness program provides a reward, but the reward is separate from the employer’s regular health plan. For example, the program offers a $30 gift card to any full-time employee who completes a Health Risk Assessment including employees not enrolled in or even eligible for the employer’s major medical plan. However, if the wellness program provides medical care, the wellness program itself would be a health plan. Examples of medical care that may be provided by a wellness program are: annual flu shots, biometric testing such as a finger stick for glucose or cholesterol levels, and individualized health coaching by a healthcare professional. Wellness programs that provide medical care are health plans by themselves and are subject to the rules applicable to health plans – such as the HIPAA and PPACA nondiscrimination requirements. If your wellness program provides medical care and is participationonly, then the rules outlined in Section 5 would apply. If your wellness program provides medical care and it outcome-based, then the rules outlined in Section 7 would apply.
NOTE: Wellness programs that provide rewards in the form of a contribution to an account that is related to a health plan such as a health reimbursement arrangement or a healthcare flexible spending account would be considered health plan-related programs rather than general educational programs. See Sections 5 through 7 for requirements.
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Following are summaries of federal laws that generally apply to participation-only programs that are not related to an employer’s health plan and are not themselves health plans. Additional rules (described separately below) apply to programs that either include the use of a health risk assessment or provide medical care.