Health

1
THE HIPAA NONDISCRIMINATION / WELLNESS PROGRAM
RULESOFFERING ONE PIECE IN THE HEALTH CARE
COST PUZZLE?

• Health Wellness Coalition of Wichita
• Fourth Annual Working Well Conference
• Jay M. Rector

2
WE HAVE APROBLEM!
3
HOW EXPENSIVE is SICK CARE?

• In 2007, total national health care spending was
  2.3 trillion (7,600 per person). It is
  projected to reach 4.2 trillion by 2016.
• Health care spending is 4.3 times the amount
  spent on national defense.
• In 2005, the United States spent 16 of its gross
  domestic product on health care. It is projected
  that it will reach 20 by 2016.
• Between 2000 and 2007, employment-based health
  insurance premiums increased 100 compared to
  cumulative inflation of 24 and cumulative wage
  growth of 21 during the same time period.

4
How Expensive is Sick Care? (continued)

• Health insurance expenses are the fastest growing
  cost component for employers. Unless something
  changes dramatically, health insurance costs are
  expected to overtake profits within the next
  several years.
• A survey of Iowa consumers found that in order to
  cope with rising health insurance costs, 86 said
  they have cut back on how much they saved and 44
  said that they have cut back on food and heating
  expenses.

5
HEALTH CARE COSTS are ONLY the TIP of the ICEBERG

• The Comptroller for the state of Texas found that
  the added costs
• related to obesity, including health care,
  absenteeism, and disability, totaled over 3.3
  billion for Texas employers alone in 2005.
• The state of Minnesota calculated that 2.6
  billion is lost in their state alone every year
  from health care expenditures and lost
  productivity caused by tobacco-related illnesses.

6
(No Transcript)
7
(No Transcript)
8
(No Transcript)
9
IS THERE HOPE?

• According to estimates from the Centers for
  Disease, 80 of cases of heart disease or stroke,
  80 of cases of diabetes, and 40 of cases of
  cancer could be prevented if Americans did 3
  simple things
• Stopped smoking
• Exercised regularly
• Ate a balanced diet
• Another study indicates that 10 of the U.S.
  population generates between 70 and 80 of
  health care costs, through large claims from
  serious illnesses such as cancer, strokes,
  diabetes, and heart disease. The same study also
  purports that 70 of cancer, 71 of
  cardiovascular disease, and 92 of adult-onset
  diabetes could be avoided if people changed their
  behaviors.

10
ARE WE INTERESTED IN WELLNESS?
11
INCENTIVES

• A story of WHALES, WORKERS, AND ATHLETES.

12
AN IMPEDIMENT - THE LAW

• HIPPAs nondiscrimination rules generally
  prohibit group health plans from discriminating
  against individuals based on health factors.

13
A SOLUTION - CHANGE the LAW

• Final HIPAA nondiscrimination/wellness program
  rules, issued December 13, 2006, were designed to
  address this obstacle by providing a limited
  exception to the prohibition against treating
  individuals differently based on a health factor.

14
HIPAAS NONDISCRIMINATION RULES

• Eligibility
• Benefits
• Source of Injury
• Pre-existing Conditions
• Premiums and Contributions
• Non-confinement and Actively at Work

15
THE OUT

• Permitted wellness programs provide a limited
  exception to the nondiscrimination rules
  applicable to benefits and premiums/contributions.
  

16
THE LOW HANGINGWELLNESS FRUIT

• A wellness program is any program designed to
  promote health or prevent disease.
• If participation in a wellness program is made
  available to all similarly situated individuals
  and none of the conditions for obtaining a reward
  are based on an individual satisfying a standard
  related to a health factor (or if a wellness
  program does not provide a reward) there are no
  additional requirements.

17
EXAMPLES

• A program that reimburses all or part of the cost
  for membership in a fitness center.
• A diagnostic testing program that provides a
  reward for participation and does not base any
  part of the reward on outcomes.
• A program that reimburses employees for the costs
  of smoking cessation programs without regard to
  whether the employee quits smoking.
• A program that provides a reward to employees for
  attending a monthly health education seminar.

18
THE OTHER WELLNESSFRUIT - REQUIREMENTS

• For wellness programs that do not satisfy the
  easy standard (i.e., the program conditions a
  reward on satisfying a standard based on a health
  factor) the wellness program must now meet six
  criteria
• 1. The value of the reward must not exceed 20
  percent of the cost of employee-only coverage (or
  20 percent of the corresponding cost if
  dependents may participate in the program). A
  reward can be in the form of a discount or rebate
  of a premium or contribution, waiver of all or
  part of the cost-sharing mechanism, the absence
  of a surcharge, or the value of an additional
  benefit.

19
REQUIREMENTS (continued)

• 2. The program must have a reasonable chance of
  promoting health or preventing disease.
• 3. The program must give individuals an
  opportunity to qualify for the reward at least
  once per year.
• 4. The reward under the program must be
  available to all similarly situated individuals.
• 5. A reasonable alternative standard (or waiver
  of the otherwise applicable standard) for
  obtaining the reward must be offered if it is
  unreasonably difficult or medically inadvisable
  for the individual to attempt to satisfy the
  otherwise applicable standard.

20
REQUIREMENTS (continued)

• 6. The plan must disclose the availability of a
  reasonable alternative standard (or the
  possibility of waiver of the otherwise applicable
  standard) in plan materials.
• Model Language If it is unreasonably difficult
  due to a medical condition for you to achieve the
  standards for the reward under this program, or
  if it is medically inadvisable for you to attempt
  to achieve the standards for the reward under
  this program, call us at ____________ and we will
  work with you to develop another way to qualify
  for the reward.

21
EXAMPLE NO. 1

• A group health plan gives an annual premium
  discount of 20 percent of the cost of
  employee-only coverage to participants who adhere
  to a wellness program. The wellness program
  consists solely of giving an annual cholesterol
  test to participants. Those participants who
  achieve a count under 200 receive the premium
  discount for the year.
• Violation?

22
EXAMPLE NO. 2

• Same facts as Example No. 1, EXCEPT, the plan
  provides the magic language. Individual G
  begins a diet and exercise program but is unable
  to achieve a cholesterol count under 200 within
  the prescribed period. Gs doctor determines G
  requires prescription medication to achieve a
  medically advisable cholesterol count. In
  addition, the doctor determines that G must be
  monitored through periodic blood tests to
  continually re-evaluate Gs health status. The
  plan accommodates G by making the discount
  available to G, but only if G follows the advice
  of Gs doctor regarding medication and blood
  tests.
• Violation?

23
EXAMPLE NO. 3

• In conjunction with an annual open enrollment
  period, a group health plan provides a form for
  participants to certify that they have not used
  tobacco products in the preceding 12 months.
  Participants who do not provide the certification
  are assessed a surcharge that is 20 percent of
  the cost of employee-only coverage. The plan has
  the magic language. It is unreasonably
  difficult for Individual H to stop smoking due to
  an addiction to nicotine (a medical condition).
  The plan accommodates H by requiring H to
  participate in a smoking cessation program to
  avoid the surcharge. H can avoid the surcharge
  as long as he participates in the program
  regardless of whether H stops smoking (as long as
  H continues to be addicted to nicotine).
• Violation?

24
THE ELEPHANT IN THE ROOM THE EEOC

• The issue of wellness programs is hardly new.
  Proposed and interim regulations came out in
  2001, meaning the EEOC has had 7 years to be
  thinking about this.
• Yet the EEOC asked that HIPAAs final regulations
  include warnings that plan practices or
  provisions permitted under the HIPAA regulations
  may violate the Americans with Disabilities Act
  (ADA).

25
THE PROBLEM

• The EEOC interprets the ADA to permit employers
  to
• Conduct voluntary medical examinations and
  inquiries as part of an employee health program
  (such as medical screening for high blood
  pressure, weight control, and cancer detection),
  provided that participation in the program is
  voluntary, information obtained is maintained
  according to the confidentiality requirements of
  the ADA... and this information is not used to
  discriminate against an employee.

26
THE EEOCSTWO-PRONG APPROACH

• We have not taken a position
• We are not going to tell you

27
PRACTICAL ADVICE

• Do not exclude or limit coverage for specific
  conditions or diseases (Disability-based
  Distinctions).
• Be hesitant to disallow enrollment or eligibility
  for coverage based on a failure to take a health
  assessment or physical examination.
• Non-reward/surcharge programs are the least risk.
  If you wish to do a reward/surcharge program,
  make sure you follow the six rules...
  particularly as to the provision of reasonable
  alternatives.
• Kansas v. Other States.

28
(No Transcript)
29

• THE END