Posts Tagged ‘Twyla Hutchins’

Know What Regulations To Consider For Your Corporate Wellness Plan

Thursday, August 22nd, 2013

The post below is a guest blog from Twyla Hutchins, RN, BSN, COHN-S who serves as Health Management Officer for CAI’s employee benefits partner, HCW Employee Benefit Services.

Twyla-HutchinsAs more companies add wellness programs to keep healthcare claim costs down, they should consider what compliance regulations need to be followed for successful program implementation. Otherwise, workplace wellness plan savings can vanish due to penalties resulting from a failure to follow the rules.

There are a few key rules to remember when setting up and monitoring a corporate wellness program that can reduce the likelihood of violations allegations for employers. Here is an overview of what to factor into an employee wellness program.

Americans with Disabilities Act (ADA)

The ADA prohibits employment discrimination against disabled individuals and limits the circumstances in which an employer may require physical examinations or answers to medical inquiries. For wellness plans to comply with ADA guidelines, voluntary medical exams and inquiries are permitted if:

  • Participation in the program is voluntary;
  • Information obtained is according to the confidentiality requirements of the ADA; and
  • Information obtained is not used to discriminate against an employee.

The gray area here is determining exactly how “voluntary” is defined, as the Equal Employment Opportunity Commission (EEOC), which oversees ADA complaints, has not issued formal guidance. However, if the wellness program requires an employee to complete a health risks assessment to become eligible for the group, the health plan would violate the ADA. Additionally, a wellness program that complies with HIPAA’s wellness regulation may not meet the requirement of the ADA.

COBRA

COBRA allows employees who lose their health benefits to choose to continue benefits provided by their group health plan for limited periods of time under certain circumstances. For wellness programs that provide physical examinations, cholesterol screenings, flu shots and similar benefits that qualify as medical care, these offerings can trigger the program to be a group health plan and thus incur COBRA responsibilities for participants.

Internal Revenue Code (IRC) Taxation

If you are offering incentives to reward employees who reach or surpass certain wellness plan goals, some may be considered taxable income, such as cash or gift cards. Other incentives may avoid taxation, including lower employee premium contributions, smaller deductibles for employees, and employer contributions to company savings and retirement accounts.

Incentives such as cash and prizes are considered taxable unless they qualify as “de minimis” in value by the Internal Revenue Service. As with the EEOC and the “voluntary” designation, what qualifies legally as “de minimis” is unclear, with amounts ranging from $10-$50 in gifts being offered by businesses with wellness programs that they believe fit this definition.

State Laws

North Carolina is one of 31 states with a lawful products protection law prohibiting discrimination against employees who use products such as tobacco outside the workplace. Employers can prohibit smoking on company property, however, as well as refuse to provide smoking breaks or other accommodations to smoking employees.

If an employer uses a wellness program that is part of an employee welfare benefit plan subject to the Employee Retirement Income Security Act (ERISA), then North Carolina’s lawful products law may be preempted. Employers that are considering charging tobacco users a higher premium for health insurance should be aware of these issues.

HIPAA

Rules for the Health Insurance Portability and Accountability Act of 1996 (HIPAA) require that, a group health plan may not discriminate against any individual or dependent because of a “health factor.” Health factors include health status, medical condition (including both mental and physical illness), claims experience, receipt of healthcare, medical history, genetic information, evidence of insurability, and disability. A group health plan may vary benefits, however, including premiums based on whether an individual has met the standards of the wellness program, if the wellness program itself meets certain requirements.

This is a tricky distinction to make, and the rules of what qualify continue to change. HCW is developing tools and a webinar to explain further the impact of HIPAA and its new rules that go into effect on Jan. 1, 2014. These items will be available in the near future.

Be cognizant of all these regulations and how they can affect your employee wellness program. If you need more immediate information on any of these considerations, contact HCW at (919) 403-1986 or visit us online.