Wellness programs may be affected by non‑discrimination laws

Employee benefits attorney Barbara Klepper was interviewed by The Oklahoman about the requirements employer-sponsored wellness programs must satisfy to qualify for HIPAA’s Nondiscrimination Exception.

The Health Insurance Portability and Accountability Act (HIPAA) generally prohibits group health plans from charging different premiums or cost-sharing requirements based on the presence or absence of a health factor. However, HIPAA provides an exception to this general rule, known as the “nondiscrimination exception,” which allows group health plans to establish premium discounts or reduced co-payments or deductibles in return for compliance with programs that promote health and disease prevention. Programs that don’t satisfy the requirements of the Nondiscrimination Exception must comply with complex nondiscrimination rules under HIPAA.

According to Klepper, different requirements apply, depending on whether the wellness program rewards a participant regardless of whether a health standard is met (a “participatory” program) or whether the program provides a reward related to achieving a particular health standard (a “health-contingent” program).

“If the program is participatory, it must simply be available to all similarly-situated individuals,” she said. “If the program is health-contingent, it must meet specific conditions that range from providing individuals the opportunity to qualify for rewards at least once a year to providing certain disclosure notices to participants.”

Klepper said employers should take extra care in structuring wellness programs to ensure that individuals have equal access to wellness program benefits and meet all of the applicable standards under health care reform.