Wellness programs are an important way to get your employees energized and involved in maintaining healthy lifestyles. They’re also a good way to manage your health care costs and lower health insurance premiums and deductibles. The programs are designed to give some type of incentive, typically monetary, for meeting certain health requirements.
But before you start implementing your program, you need to make sure it’s compliant with many of the health care laws.
“You run into some large financial penalties if you do not comply with these laws,” says Nick Tomlinson, an associate with Baker, Donelson, Bearman, Caldwell & Berkowitz, PC.
Smart Business learned more from Tomlinson about making sure your wellness program is compliant with the various statutes.
What compliance issues are associated with wellness programs?
The two big ones are the Health Insurance Portability and Accountability Act (HIPAA) and the Genetic Information Nondiscrimination Act (GINA). The HIPAA rules make sure you’re not discriminating against the least healthy of people, those who would benefit the most from wellness programs.
GINA has a broad prohibition against the collection of genetic information. This affects wellness programs because many use health risk assessments (HRAs) to collect medical information on members. The HRA should not contain any information regarding family medical history, because that is considered genetic information under GINA.
What penalties do you run into by not complying with these statutes?
Penalties for employers who violate GINA range from $50,000 to $300,000, as it is a violation of Title VII of the Civil Rights Act. GINA also has a built-in penalty for health plans. There is a $100 fee for each day and each participant that a plan is not compliant. For example, if you’re noncompliant for 10 participants for 10 days, you’ll receive a $100,000 penalty. There is a $500,000 cap on this. So it can go on for a while and adds up fairly quickly.
How can you make sure your wellness program is compliant with the nondiscrimination rules?
You’re subject to the nondiscrimination rules if your plan is part of a group health plan and has certain participation incentives. One way to comply is to allow everyone to participate in the program, regardless of the end result. For example, you offer employees a monetary incentive for participating in a health fair, regardless of the outcome.
However, you have to worry about discrimination if your plan requires members to maintain certain metrics to receive an incentive. You can engage in benign discrimination but have to meet five crucial steps.
- The incentive must be no more than 20 percent of your contribution to the health plan.
- The program must promote health or prevent disease and must be available to all similarly situated individuals in the company.
- You must provide a reasonable alternative for employees who cannot meet the metric due to a health condition. For example, an employee with diabetes may not be able to meet the body mass index requirement, so you can provide an alternative standard so that person can participate in some form and get the same incentive.
- You have to communicate this alternative to program members. You don’t have to tell them what it is, but they at least need to be aware of it.
- All members need to be able to qualify for the incentive at least once per year.
How can you make sure your wellness program is compliant with GINA?
GINA was passed in May 2008, but the regulations were issued at the beginning of October 2009, so everyone is concerned about it now. GINA defines ‘genetic information’ as the testing of an individual’s genetics through means such as a blood test or by providing family medical history. While your plan might be compliant with the nondiscrimination rules, it may not be compliant with GINA. For example, you offer employees incentive for completing an HRA. You’re not discriminating, but the HRA might be full of questions related to family medical history.
There are two ways to make your program compliant. The first is to take out all genetic or family history questions from your HRA and still offer an incentive for taking it, sans these questions. But you have to be careful about the questions you’re asking. You may not be directly asking about family medical history, but a question might lend itself to revealing this type of information. For example, asking someone if they’ve ever been tested for a certain disease might reveal some genetic information. You have to tell employees to not reveal any information related to family medical history when completing the HRA.
You can also offer an HRA that includes family history questions, but it can’t be tied to an incentive. How you implement the wellness program is also key, and you can work with your attorney or third-party administrator to make sure you’re compliant with the rules.
The GINA regulations are still evolving and cover a broad area, including employment-based decisions. You need to be communicating with your vendors to make sure your plan and program are compliant with the new regulations, especially as the new plan year rolls around.
Nick Tomlinson is an associate with Baker, Donelson, Bearman, Caldwell & Berkowitz, PC. Reach him at (404) 221-6537 or firstname.lastname@example.org.