75th Annual NHRMA - NHRMA 2014 Conference
Transcript of 75th Annual NHRMA - NHRMA 2014 Conference
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1 © 2013 Lane Powell PC
A Bridge to Tomorrow
75th Annual NHRMA
Conference & Tradeshow
Presented by
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2 © 2013 Lane Powell PC
Can Employers Legally
Discriminate Against
Obese, Sick & Lazy People?
Katheryn Bradley
Craig A. Day Lane Powell PC
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3 © 2013 Lane Powell PC 3
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Overview • Wellness Programs
–HIPAA Final Regulations
–EEOC Developments
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5 © 2013 Lane Powell PC
Final HIPAA Wellness Rules • HIPAA non-discrimination rules
prohibit discrimination against
individuals based on health status:
– Except benign discrimination in favor of
individual with adverse health status
– So long as HIPAA wellness rules are met
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Final HIPAA Wellness Rules
• Affordable Care Act codified most
HIPAA wellness program rules
• Proposed wellness rules issued
November 26, 2012
• Final rules issued June 3, 2013
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Final HIPAA Wellness Rules
• Participatory:
–Reward not based on health factor
–HIPAA wellness rules do not apply
–Other laws may apply
–Examples
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Final HIPAA Wellness Rules
• Health-contingent
–Reward based on health factor
–HIPAA wellness rules apply
–NEW: two subcategories: • Activity only
• Outcome based
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Final HIPAA Wellness Rules
• Activity based – Individual required to complete
activity related to health factor but no required outcome
–E.g., walking, diet or exercise programs
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Final HIPAA Wellness Rules
• Outcome based – Individual required to attain or
maintain specific health outcome to obtain reward
–E.g., reward for not smoking, certain result on biometric screening, or reward for favorable BMI
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Final HIPAA Wellness Rules
• Health-Contingent Wellness Program
• Five requirements:
– Annual qualification
– Amount of reward/penalty
– Reasonable design
– Reasonable alternative
– Notice of reasonable alternative
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Final HIPAA Wellness Rules
• Amount of reward – Old rule: rewards for all health-contingent programs
not to exceed 20% of single employee coverage
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Final HIPAA Wellness Rules
• Amount of reward –New Rule:
• 30% limit for all health-based wellness programs
• Tobacco — reward may not exceed 50%
–Tobacco only — up to 50%
–Combined — other rewards limited to 30%; tobacco may provide additional 20% reward
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Final HIPAA Wellness Rules
• Reasonable alternatives:
–Old Rule:
• Provide reasonable alternative to those who show it is unreasonably difficult due to medical condition or medically inadvisable to satisfy standard
• May require doctor’s note
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Final HIPAA Wellness Rules
• Reasonable alternatives:
– New Rule:
• If education, employer must provide
• If diet, employer must pay for membership (not food)
• If time commitment, it must be reasonable
• If doctor says standard not “medically appropriate,” plan must accommodate doctor recommendations but may impose otherwise applicable cost sharing
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Final HIPAA Wellness Rules
• New Reasonable Alternative Rules for activity-based standard:
– Medical reasonable alternative required if unreasonably difficult due to medical condition or medically inadvisable to satisfy standard
– Could be medical judgment decision ultimately subject to external review
– Can require doctor’s note if reasonable
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Final HIPAA Wellness Rules
• Reasonable Alternative for
Outcome-based Standard
–Must give alternative to anyone who
fails test
–No medical reasonable alternative
–No doctor’s note can be required
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Final HIPAA Wellness Rules
• Unlimited Alternatives? – If alternative is participatory, no further
alternatives required
– If alternative is activity-based, must give second alternative if individual medically incapable of satisfying
– If alternative is outcome-based, must give second alternative to anyone who fails AND two special rules apply
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Final HIPAA Wellness Rules
• Special rules
– If alternative is outcome-based must give
second alternative to anyone who fails
PLUS
• If alternative is outcome-based, must allow
time to comply
• Must allow individual to work with personal
physician to craft tailored alternative
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Final HIPAA Wellness Rules
• Reasonable alternative — payment of
reward
– Must pay same/full reward as someone who
met initial standard
– May need to pay reward retroactively or pro
rata going forward
– Must pay in same year in which earned (or
shortly thereafter)
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21 © 2013 Lane Powell PC
Final HIPAA Wellness Rules
• Notice of reasonable alternative — new requirements:
– Must include contact information and statement that recommendations of personal physician will be accommodated
– Required where plan references premium differential based on wellness program
– For outcome based standards, required in notice that individual failed standard
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Genetic Information
Nondiscrimination Act of 2008
• GINA prohibits discrimination based on genetic information in terms and conditions of employment
• Genetic information means information about – Genetic tests or
– Any disease, disorder, or condition of an individual’s family members • i.e., family medical history
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EEOC’s GINA Rules
•Plan cannot offer incentive for completion of HSA that asks family history or collects genetic information
•Any HSA must make it clear that answering questions about family medical history is optional and employee will not be penalized for not answering
•Any HSA should include the GINA disclaimer
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Americans with
Disabilities Act
• ADA prohibits “medical examinations and inquiries” unless voluntary
• ADA requires medical information be kept in separate confidential file
• Early Guidance: Carrot okay, but “stick” illegal because not voluntary
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ADA’s Safe Harbor
ADA shall not be construed as prohibiting
a covered entity from establishing,
sponsoring, observing or administering
the terms of a bona fide benefit plan that
are based on underwriting risks,
classifying risks or administering such
risks that are based on or not inconsistent
with state law.
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ADA’s Safe Harbor
• Seff v. Broward County (11th Circ. 2012):
– Safe harbor provision exempted wellness
program from ADA prohibitions
– No other decisions yet
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EEOC and Wellness • EEOC: Compliance with GINA and HIPAA
wellness rules does not mean compliance with other non-discrimination laws enforced by the EEOC
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EEOC and Wellness
• January 2013
• EEOC Informal Discussion Letter – Implies that reward could constitute
penalties to non-participants, making the program “involuntary”
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29 © 2013 Lane Powell PC
EEOC and Wellness
• EEOC Informal Discussion Letter
– If wellness program is outcome-based or
requires participation in an activity to earn
reward, EEOC states employer must
provide reasonable accommodation to
those who cannot meet requirements
• Note: consistent with wellness rules under
HIPAA
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EEOC and Wellness
• Public Meeting (May 8, 2013)
– Penalties (or withholding reward) for failure to
meet certain health standards could be
subject to disparate impact challenge
– Advocates cited disparate impact on women,
racial minorities, disabled, older workers
– Failure to consider that individual has multiple
jobs/family responsibilities could lead to
caregiver discrimination
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EEOC and Wellness
• Public Meeting (May 8, 2013)
– EEOC commissioners acknowledge
guidance is needed so employers know
whether meeting other wellness rules will
be sufficient to comply with anti-
discrimination laws
– But no guidance issued so far….
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Wellness Programs:
Best Practices
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• Consider participatory programs not tied to
specific outcomes
• Use a separate vendor to meet confidentiality
requirements
• Avoid large incentives that may disadvantage
those with disabilities
• Comply with GINA and HIPAA rules
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Katheryn Bradley
Craig A. Day Lane Powell PC
206.223.7000
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