Recent history has a seen a trend in
companies implementing Wellness Plans. At their core, Wellness plans are meant
to improve the health of employees and therefore help to keep down the overall
cost of healthcare. Healthy employees improve a company’s productivity and cut
down on missed work due to health issues. In theory, putting together a Wellness
Plan seems like a straightforward operation. In actuality, there are many
choices that must be made and many laws that must be followed.
There are two types of Wellness Plans:
Participation Only Programs and Standards Based Programs. Both types have the
same goal of helping employees be as healthy as possible; however, the way they
go about it is very different.
Participation
Only Programs
In Participation Only Programs, the
only requirement is participation. As long as the employee follows that
requirement, the employee receives incentives. There are no goals or standards
that must be met. This type of program may center around education. For
example, the company offers seminars on healthy eating or classes about the
benefits of exercise, and those that attend receive an incentive. The
incentives offered in this type of plan can also feature things like gym
membership discounts, cooking classes, or a free health fair. These types of
plans are not considered a health plan and are therefore not subject to HIPAA
guidelines. It is a requirement that these plans be available to everyone in
the same station in a company and cannot be based on health. For example, diabetes
awareness must be offered to all full time employees, and not only to those
with diabetes. Companies often choose the Participation Only route because
there are less hurdles and rules when the plan is not considered to be a health
plan.
Standards Based
Plan
In a Standards Based Plan, the
employee must meet goals or standards based on health conditions in order to
receive incentives. These types of plans often involve screenings and testing
to determine what the goals should be for each employee. The goals normally
involve meeting certain lifestyle standards, such as smoking cessation or
lowering BMI. They can also feature an education component and diagnostic
testing. Because a Standards Based Plan provides medical benefits through
testing and screenings, it is considered a health plan and is subject to all HIPAA
rules and regulations.
According to the Department of Labor,
HIPAA has the five following requirements for Standards Based Plans:
- The total reward for all the plan’s wellness programs that require satisfaction of a standard related to a health factor is limited – generally, it must not exceed 20 percent of the cost of employee-only coverage under the plan. If dependents (such as spouses and/or dependent children) may participate in the wellness program, the reward must not exceed 20 percent of the cost of the coverage in which an employee and any dependents are enrolled.
- The program must be reasonably designed to promote health and prevent disease.
- The program must give individuals eligible to participate the opportunity to qualify for the reward at least once per year.
- The reward must be available to all similarly situated individuals. The program must allow a reasonable alternative standard (or waiver of initial standard) for obtaining the reward to any individual for whom it is unreasonably difficult due to a medical condition, or medically inadvisable, to satisfy the initial standard.
- The plan must disclose in all materials describing the terms of the program the availability of a reasonable alternative standard (or the possibility of a waiver of the initial standard).
HIPAA also decrees that a
Standards Based Plan cannot be structured in a way that the outcomes are
measured from protected data. Also, all data must be kept confidential at all
times.
HIPAA
is not the only law that governs how a plan must be designed and administered.
GINA and ADA also have rules concerning Wellness Plans. Wellness Plans, Part 2 will discuss the
limitations that the ADA and GINA put on Employer Wellness Plans.
Sources:
Employee
Benefits Security Administration (n.d.) FAQs About The HIPAA Nondiscrimination Requirements. United States Department of Labor. Retrieved
November 19, 2012. http://www.dol.gov/ebsa/faqs/faq_hipaa_ND.html#.UKpnf-QR5c0
Mastroianni, Peggy
R. (August
19, 2011). ADA & GINA:
Incentives For Workplace Wellness Programs. The U.S.
Equal Employment Opportunity Commission. Retrieved November 19, 2012. http.://www.eeoc.gov/eeoc/foia/letters/2011/ada_gina_incentives.html
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