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Health Law Perspectives, June 2015

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Health Law Perspectives, June 2015 HEALTH LAW PERSPECTIVES Newsletter | Volume 17 | No. 5 June 2015 Antidiscriminaton Considerations for Employer-based Wellness Programs - Existing Law and New Proposed Regulations and Guidance By Sandi Krul, Co-Chair of the Hooper, Lundy & As is the case with health care programs and Bookman Diversity Initiative facilities generally, these employer-sponsored wellness programs and health clinics are subject to a complex In response to a growing lifestyle disease epidemic regulatory framework. A significant portion of that over the last several decades, and the resulting adverse regulatory framework focuses on health care related impact on employee health and well-being, there is in- regulatory issues such as the corporate practice of med- creased interest in employer-based wellness programs, icine and fraud and abuse laws. However, employ- as well as employer-based health clinics. According to er-based health programs must also comport with the RAND Health’s Workplace Wellness Programs Study myriad of state and federal non-discrimination rules, Final Report (2013), recognizing that these chronic including those promulgated pursuant to the Health conditions lead to lowered productivity due to Insurance Portability and Accountability Act of 1996 absence from illness (absenteeism) and reduced perfor- (HIPAA), as amended by the Patient Protection and mance even while at work (presenteeism), as well as the Affordable Care Act (the ACA) and the June 2013 final associated increase in health care coverage costs and re- regulations respecting Incentives for Non-discriminato- duced competitiveness in the marketplace, about half ry Wellness Programs in Group Health Plans at 78 FR of all U.S. employers with 50 or more employees offer 33158 (the 2013 Final Regulations), as well as Title I of workplace wellness programs. the Americans with Disabilities Act (ADA), enforced by the Equal Employment Opportunity Commission (EEOC). This article will examine these HIPAA and ADA non-dis- crimination rules as applicable to employer-based well- In This Issue ness programs, including the EEOC’s new proposed rule specifically addressing the use of incentives in employ- • Antidiscrimination Considerations for er-based wellness programs under the ADA. Employee-based Wellness Programs HIPAA Anti-Discrimination Requirements for Wellness Programs. • HC Provider Implications of Supreme HIPAA (as modified by Section 1201 of the ACA and Court’s Recent FCA Decision the 2013 Final Regulations), prohibits discrimination in group health plans (premiums, benefits or eligibility) • OIG Issues Fraud Alert on based on any health factor, and employer-sponsored Physician Compensation wellness programs that are part of a group health plan are subject to that antidiscrimination prohibition.1 How- ever, an exception to that general prohibition allows 1 | Health Law Perspectives | Hooper, Lundy & Bookman, PC | Health Care Lawyers & Advisors premium discounts, rebates or modifications to oth- ADA Anti-Discrimination Requirements and New Pro- erwise applicable cost sharing (including copayments, posed Rule for Wellness Programs. deductibles or coinsurance) in return for adherence The ADA prohibits discrimination against individuals to certain programs of health promotion and disease on the basis of disability, “in regard to… employment prevention.2 In applying that exception, HIPAA’s an- compensation… and other terms, conditions, and privi- ti-discrimination laws distinguish between two types of leges of employment,” including employee benefits such wellness programs – participatory wellness programs as health insurance benefits, regardless of whether such and health-contingent wellness programs. benefits are administered by the covered entity. Absent Participatory wellness programs either do not pro- undue hardship, Title I of the ADA also requires employ- vide a reward, or do not include any conditions for ob- ers to provide reasonable accommodations (modifications taining a reward that are based on an individual satisfy- or adjustments) to enable employees with disabilities to ing a standard related to a health factor. Participatory earn whatever financial incentive an employer or other wellness programs are permissible under HIPAA non- covered entity offers (irrespective of whether a wellness discrimination requirements if available to all similarly program includes disability-related inquiries or medical ex- situated individuals. aminations), so that individuals with disabilities have equal Health-contingent wellness programs, on the other access to the benefits offered to employees without dis- hand, may be either “activity-only” (i.e., require indi- abilities. viduals to perform or complete an activity related to a Title I of the ADA further limits an employer’s ability to health factor in order to obtain a reward, but do not make disability-related inquiries, and from requiring med- require an individual to attain or maintain a specific ical examinations, unless such inquiry or examination is health outcome) or “outcome based” (i.e., require in- shown to be job-related and consistent with business ne- dividuals to attain or maintain a standard related to a cessity.3 The ADA provides an exception to this limitation, health factor to obtain a reward, such as not smoking allowing for “voluntary” medical examinations, including or attaining certain results on a biometric screening, or “voluntary” medical histories, which are part of an em- require an individual to undertake more than a similar- ployee health program available to employees at the work ly situated individual based on a health factor to ob- site.4 However, until now, there was limited guidance on tain the same reward). Under HIPAA regulations and the interplay between financial incentives in wellness pro- guidance, these health-contingent wellness programs grams and the ADA. must meet the following requirements: (1) give all in- The EEOC’s interpretation of the term “voluntary” in dividuals eligible for the health-contingent wellness the ADA’s disability-related inquiries and medical examina- program the opportunity to qualify for the reward at tions provision is central to the interaction between the least once a year, (2) the total reward offered to an ADA and HIPAA’s wellness program provisions, as amend- individual cannot exceed 30 percent of the total cost ed by the ACA. Because of insufficient guidance on this of employee-only coverage under the plan (or 50 per- issue in the ADA, the EEOC issued a proposed rule on April cent if attributed to tobacco prevention or reduction), 16, 2015, to amend the implementing regulations of Title (3) be reasonably designed to promote health or pre- I of the ADA (at 29 CFR Part 1630), and related interpre- vent disease, (4) the full reward must be available to all tative guidance, respecting employer wellness programs similarly situated individuals, and (5) plans and issuers (the “Proposed Rule”). The Proposed Rule addresses the must disclose the availability of a reasonable alternative extent to which incentives (both financial and non-finan- standard to qualify for the reward in all plan materials cial incentives such as time off, prizes and other items of and disclosures. value) might affect the voluntary nature of such wellness The 2013 Final Regulations recognize that an em- program. ployer-based wellness program’s compliance with HI- More specifically, the Proposed Rule addresses the PAA nondiscrimination rules (as amended by the ACA), extent to which employers may utilize incentives as a including the wellness program requirements de- means of encouraging employee participation in well- scribed above, is not determinative of compliance with ness programs, when those programs include disabili- any other provision of state or federal law, including, ty-related inquiries and/or medical examinations. The but not limited to, the ADA wellness program require- Proposed Rule helps to bring the ADA in line with HIP- ments. Of course, the programs must be administered PA, as amended by the ACA and related regulations in compliance with HIPAA’s Privacy, Security and Breach (which established the 30 percent incentive limit under Notification requirements set forth in 45 CFR part 160 HIPPA - 50 percent if attributed to tobacco prevention or and part 164. reduction). (continued on page 4) Hooper, Lundy & Bookman, PC | Health Care Lawyers & Advisors | Health Law Perspectives | 2 HLB, Attorneys Recognized as Top Health Law Performers HLB is pleased to announce recognition by Chambers & Partners, The Legal 500 and SuperLawyers as a top law firm with top-rated lawyers in the United States, in California, and in Washington, D.C. Each organization uses some combination of peer recognition, interviews with Managing Partners and clients, and outside research. Chambers & Partners Chambers & Partners has recognized HLB as a top health law firm in the nation. As part of its research, Cham- bers recorded statements from clients, including: “A very good firm offering excellent, substantive advice.” And “Their healthcare regulatory advice is top-notch.” In addition, Chambers noted that HLB offers “significant expertise in long- term care matters as part of a broad healthcare practice.” Chambers’ national recognition is in addition to the firm once again being recognized as a top tier firm in California. Along with firm recognition, Chambers also recognized the following attorneys as top in the field of health law. Nationwide HC Regulatory & Litigation Lloyd A. Bookman Patric Hooper
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