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WASHINGTON--Federal agencies have issued final rules providing employer guidance in complying with the nondiscrimination provision of the Health Insurance Portability and Accountability Act and the implementation of wellness programs.
The final regulations, issued Tuesday, in general do not change the 2001 interim rules issued by the departments of Labor, Health and Human Services and the Treasury, which allow employers to provide incentives of up to 20% of the cost of coverage to encourage participants to participate in wellness programs. The final regulations do, however, clarify some issues under the HIPAA nondiscrimination provisions and provide the first examples of wellness programs that are not subject to additional standards.
The HIPAA nondiscrimination provisions generally prohibit group health plans from charging similarly situated individuals different premiums or contributions, or imposing different deductibles, copayments or other cost-sharing requirements based on a health factor. They do, however, allow plans to offer wellness incentives to encourage program participation as long as none of the conditions for obtaining a reward are based on an individual satisfying a standard related to a health factor.
If the reward is based on satisfying a standard related to a health factor, the wellness program, among other requirements, must offer rewards that equal no more than 20% of the cost of coverage, be reasonably designed to promote health and prevent disease, and allow individuals at least one year to qualify for the reward.
The final rules for the first time give examples of wellness programs that comply with HIPAA's nondiscrimination requirements without having to satisfy the additional standards. They include:
Because the maximum reimbursement under a group health plan to any employee in any single period may vary based on the employee's claims experience, concerns have arisen about the application of HIPAA's nondiscrimination rules, according to the federal agencies.
According to the regulations, an employer is not in violation of HIPAA if the maximum annual reimbursement to an employee is a uniform amount.
The final regulations, published in the Federal Register Dec. 13, are effective Feb. 12, 2007, and apply for plan years beginning on or after July 1, 2007.