Insurance and benefits plans are not static documents. Just as employers make changes to attract the best workers, the state and federal governments are constantly making changes and tweaks to better clarify rules for American workers. For example, recently, the U.S. Department of Labor updated all forms required to comply with the Family and Medical Leave Act to clarify and streamline the process.
Below are key areas of recent legal change.
Excepted benefitsThe IRS, the Department of Labor and the Department of Health and Human Services recently issued final regulations regarding exceptable benefits.
Excepted benefits generally are exempt from requirements under the Health Insurance Portability and Accountability Act and the Affordable Care Act. Group health plans, in limited circumstances, may offer wraparound coverage to workers who buy individual health insurance in the private market, including through the health insurance marketplace. However, five conditions must be met for the wraparound coverage to qualify as an excepted benefit.
First, the wraparound coverage must give meaningful benefits past cost sharing under the associate’s individual health coverage. Second, the annual cost of coverage under the plan may not surpass specific limits. Third, the coverage must meet nondiscrimination mandates. Fourth, the plan must adhere to certain eligibility and benefits standards. Lastly, the plan must report certain data to the government.
Wellness programsRecently, the Equal Employment Opportunity Commission issued a proposed regulation to amend current EEOC regulations on how the Americans with Disabilities Act applies to wellness programs that are part of a group health plan.
This proposed regulation has been much anticipated due to the EEOC suing companies last year, stating their wellness programs violated the ADA’s ban against inquiries and exams that are not voluntary. The EEOC did not care that the employers’ programs were tailored to comply with the parameters of the HIPAA and the ACA, as well as the joint regulations issued by the DOL, the IRS and the HHS.
The EEOC-proposed regulation impacts wellness programs in four key areas.
First, HIPAA and the joint regulations impose mandates for health-contingent wellness programs, such as lowering cholesterol. The EEOC-proposed regulation would apply to both health-contingent and participatory wellness programs, such as gym memberships.
Second, under HIPAA, if dependents may participate in the wellness program, the incentive must be restricted to 30 percent of the total cost of the employee-plus-dependent coverage. The EEOC proposes the incentive be limited to 30 percent of the total cost of the employee-only coverage.
Third, HIPAA and the joint regulations require a reasonable alternative standard for earning the incentive to individuals medically unable to fulfill the standard for health-contingent wellness programs. The EEOC-proposed regulation would apply the reasonable accommodation mandate to all wellness programs.
Fourth, the regulation would require corporations to give a notice to eligible program participants that clearly describes the medical information that will be acquired, who will have the medical information, how the information will be utilized, the limits on disclosure, and how inappropriate disclosure will be averted.
The EEOC has requested comments until June 19. Due to the EEOC’s lawsuits, it is highly likely the proposed regulation will become final.
In the meantime, businesses should be reviewing their current wellness programs and determining modifications to comply.
Lynne Haggerman, is president/owner of Lynne Haggerman & Associates LLC, a Springfield firm specializing in management training, retained search, outplacement and human resource consulting. She can be reached at lynne@lynnehaggerman.com.
