October is a great month to think about your personal and school’s health. It’s National Breast Cancer Awareness Month, World Blindness Awareness Month, and Bullying Prevention Month. It’s also National Financial Planning Month. And, as you probably know, it’s nearly impossible to think about health prevention without also thinking about your—and your school’s—bottom line.
Wellness programs are known to help reduce a school’s health insurance costs. They can be designed to work in several ways that match your mission and reflect your values. However, if your school offers a wellness program either in connection with your health insurance or as a stand-alone program, the Affordable Care Act (ACA) and the Equal Employment Opportunity Commission (EEOC) have implemented rules about your program—and the regulations depend on the type of plan you offer.
For the sake of the rules, they have separated the plans into two main groups: either “Participatory Only” or “Health Contingent Based.”
“Participatory Only” plans are programs in which an employee participates in an activity and receives a reward regardless of achieving a goal. Examples of a Participatory Only plan would be a having a gym membership, participating in a health fair, or having a physical without regard to follow-up.
“Health Contingent Based” plans are those in which an employee is rewarded for achieving a goal. “Health Contingent Based Plans” are further broken into two groups: either “Activity Only” or “Outcome Based.” An example of an “Activity Only” plan is a walking or exercise program. Examples of “Outcome Based” plans include smoke cessation programs, reaching a certain BMI, or lowering blood pressure.
The EEOC has scrutinized these wellness plans and their incentives under the Americans with Disability Act (ADA) and Genetic Information Nondiscrimination Act (GINA), particularly the “voluntary” status of participating. In response, the ACA has updated its guidance on wellness rewards.
Under the ACA, Health Contingent Wellness Programs must follow 5 rules.
- The program must give individuals an opportunity to qualify for the reward at least once a year.
- The reward cannot be more than 30% of the cost of coverage for health insurance (50% for smoke cessation).
- The plan must be designed to promote health or prevent disease. It cannot:
- be overly burdensome;
- a subterfuge for discriminating based on health factor; or
- highly suspect in the method chosen to promote health or prevent disease.
- The plan must be available to all similarly situated employees.
- There must be a reasonable alternative for individuals for whom the program is too difficult based on a medical condition.
- The plan must be clearly defined along with the availability of a reasonable alternative to achieve the reward.
On April 20, 2015, the EEOC proposed new regulations on what a wellness plan must do to satisfy the ADA Title 1. The proposed regulations define a “voluntary” medical exam, and outline the requirements necessary to comply with the ADA for all wellness plans. The EEOC did not release guidance on satisfying GINA, but stated that they will in the future.
The proposed regulations allow for voluntary medical exams—including medical history—which are part of an employee’s health program (including wellness programs). To be a voluntary health plan, the plan can only incent/penalize an employee 30% of the total cost of the individual only health premium. The rules continue with the following points.
- An employer cannot require employees to participate. This includes:
- denying or limiting coverage to non-participants; and
- taking adverse employment action against employees who do not participate or fail to achieve the desired health outcome.
- If part of a Group Health Plan, employees must be given clear notice that describes the type of medical information to be obtained and purpose for which it will be used.
- Information obtained using the voluntary method can only be provided to the employer in an aggregate term that does not disclose the identity of employee.
- The plan must be reasonably designed to promote health or prevent disease, and not be overly burdensome.
Additional ISM resources:
The Source for Business Managers Vol. 11 No. 8 Just a Few More Wellness Program Ideas
The Source for Business Managers Vol. 12 No. 1 Employee Benefits You Might Not Think of as Benefits
The Source for Risk Managers Vol. 5 No. 1 An App a Day Keeps the Doctor Away
