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The term “evidence of insurability” includes conditions arising
from acts of domestic violence, as well as participation in activities
such as motorcycling, snowmobiling, all-terrain vehicle riding, horseback
riding, skiing, and other similar activities.
No. A group health plan may not require an individual to pass a
physical exam for enrollment, even if the individual is a late enrollee.
Yes, provided that the health information is not used to deny,
restrict, or delay eligibility or benefits, or to determine individual
premiums.
Group health plans may exclude coverage for a specific disease, limit
or exclude benefits for certain types of treatments or drugs, or limit or
exclude benefits based on a determination that the benefits are
experimental or medically unnecessary - but only if the benefit
restriction applies uniformly to all similarly situated individuals and is
not directed at individual participants or beneficiaries based on a health
factor they may have. (Plan amendments that apply to all individuals in a
group of similarly situated individuals and that are effective no earlier
than the first day of the next plan year after the amendment is adopted
are not considered to be directed at individual participants and
beneficiaries.)
Compliance with HIPAA’s nondiscrimination provisions does not in any
way reflect compliance with any other provision of ERISA (including COBRA
and ERISA’s fiduciary provisions). Nor does it reflect compliance with
other State or Federal laws (such as the Americans with Disabilities Act).
If the injury results from a medical condition or an act of domestic
violence, a plan may not deny benefits for the injury - if it is an injury
the plan would otherwise cover.
For example, a plan may not exclude coverage for self-inflicted
injuries (or injuries resulted from attempted suicide) if the individual’s
injuries are otherwise covered by the plan and if the injuries are the
result of a medical condition (such as depression).
However, a plan may exclude coverage for injuries that do not result
from a medical condition or domestic violence, such as injuries sustained
in high risk activities (for example, bungee jumping). But the plan could
not exclude an individual from enrollment for coverage because the
individual participated in bungee jumping.
No. Group health plans cannot charge an individual more for coverage
than other similarly situated individuals based on any health factor.
Distinctions among groups of similarly situated participants in a
health plan must be based on bona-fide employment-based classifications
consistent with the employer’s usual business practice. Distinctions
cannot be based on any of the health factors noted earlier.
For example, part-time and full-time employees, employees working in
different geographic locations, and employees with different dates of hire
or lengths of service can be treated as distinct groups of similarly
situated individuals, with different eligibility provisions, different
benefit restrictions, or different costs, provided the distinction is
consistent with the employer’s usual business practice.
In addition, a plan generally may treat participants and beneficiaries
as two separate groups of similarly situated participants. The plan also
may distinguish between beneficiaries based on, for example, their
relationship to the plan participant (such as spouse or dependent child)
or based on the age or student status of dependent children.
In any case, a plan cannot create or modify a classification directed
at individual participants or beneficiaries based on one or more of the
health factors.
Yes. In fact, HIPAA does not restrict a health insurance issuer from
charging a higher rate to one group health plan (or employer) over
another. An issuer may take health factors of individuals into account
when establishing blended, aggregate rates for group health plans (or
employers). This may result in one health plan (or employer) being charged
a higher premium than another for the same coverage through the same
issuer.
No. Issuers may not charge or quote an employer or group health plan
separate rates that vary for individuals (commonly referred to as “list
billing”), based on any of the health factors.
This does not prevent issuers from taking the health factors of each
individual into account when establishing a blended, aggregate rate for
providing coverage to the employment-based group overall. The issuer may
then charge the employer (or plan) a higher overall rate, or a higher
blended per-participant rate.
While HIPAA prohibits list billing based on health factors, it does not
restrict communications between issuers and employers (or plans) regarding
the factors considered in the rate calculations.
No. A group health plan may not deny or delay an individual’s
eligibility, benefits, or the effective date of coverage because that
individual is confined to a hospital or other health care facility. In
addition, a health plan may not set an individual’s premium rate based
on that person’s confinement.
No. Generally a group health plan may not refuse to provide benefits
because an individual is not actively at work on the day that individual
would otherwise become eligible for benefits. However, plans may have
actively-at-work clauses if the plan treats individuals who are absent
from work due to a health factor (for example, individuals taking sick
leave) as if they are actively at work for purposes of health coverage.
Plans may require individuals to report for the first day of work
before coverage may become effective. In addition, plans may distinguish
among groups of similarly situated individuals in their eligibility
provisions. For example, a plan may require an individual to work full
time, such as 250 hours per quarter or 30 hours per week to be eligible
for health plan coverage.
Yes, a plan can treat an individual with an adverse health factor more
favorably by offering extended coverage.
The HIPAA nondiscrimination provisions generally prohibit group health
plans from charging similarly situated individuals different premiums or
contributions or imposing different deductible, copayment or other cost
sharing requirements based on a health factor. However, there is an
exception that allows plans to offer wellness programs.
If none of the conditions for obtaining a reward under a wellness
program are based on an individual satisfying a standard related to health
factor, or if no reward is offered, the program complies with the
nondiscrimination requirements (assuming participation in the program is
made available to all similarly situated individuals). For example:
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A program that reimburses all or part of the cost for memberships in
a fitness center.
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A diagnostic testing program that provides a reward for
participation rather than outcomes.
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A program that encourages preventive care by waiving the copayment
or deductible requirement for the costs of, for example, prenatal care or
well-baby visits.
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A program that reimburses employees for the costs of smoking
cessation programs without regard to whether the employee quits smoking.
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A program that provides a reward to employees for attending a
monthly health education seminar.
Wellness programs that condition a reward on an individual satisfying a
standard related to a health factor must meet five requirements described
in the final rules in order to comply with the nondiscrimination rules.
The wellness program rules are generally effective for the plan year
starting on or after July 1, 2007.
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The total reward for all the plan’s wellness programs that require
satisfaction of a standard related to a health factor is limited –
generally, it must not exceed 20 percent of the cost of employee-only
coverage under the plan. If dependents (such as spouses and/or dependent
children) may participate in the wellness program, the reward must not
exceed 20 percent of the cost of the coverage in which an employee and any
dependents are enrolled.
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The program must be reasonably designed to promote health and
prevent disease.
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The program must give individuals eligible to participate the
opportunity to qualify for the reward at least once per year.
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The reward must be available to all similarly situated individuals.
The program must allow a reasonable alternative standard (or waiver of
initial standard) for obtaining the reward to any individual for whom it
is unreasonably difficult due to a medical condition, or medically
inadvisable, to satisfy the initial standard.
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The plan must disclose in all materials describing the terms of the
program the availability of a reasonable alternative standard (or the
possibility of a waiver of the initial standard).
The plan’s program does not base any reward on the outcome of the
testing. Thus, it is allowed under the HIPAA nondiscrimination provisions
without being subject to the five requirements for wellness programs that
do require satisfaction of a standard related to a health factor.
The plan is offering a reward based on an individual’s ability to
stop smoking.
Medical evidence suggests that smoking may be related to a health
factor. The Diagnostic and Statistical Manual of Mental Disorders, which
states that nicotine addiction is a medical condition, supports that
position. In addition, a report of the Surgeon General adds that
scientists in the field of drug addiction agree that nicotine, a substance
common to all forms of tobacco, is a powerfully addictive drug.
For a group health plan to maintain a premium differential between
smokers and nonsmokers and not be considered discriminatory, the plan’s
nonsmoking program would need to meet the five requirements for wellness
programs that require satisfaction of a standard related to a health
factor.
Accordingly, under the final rules, this wellness program would be
permitted if:
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The premium differential is not more than 20 percent of the total
cost of employee-only coverage (or 20% of the cost of coverage if
dependents can participate in the program);
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The program is reasonably designed to promote health and prevent
disease;
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Individuals eligible for the program are given an opportunity to
qualify for the discount at least once per year;
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The program accommodates individuals for whom it is unreasonably
difficult to quit using tobacco products due to addiction by providing a
reasonable alternative standard (such as a discount in return for
attending educational classes or for trying a nicotine patch); and
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Plan materials describing the terms of the premium differential
describe the availability of a reasonable alternative standard to qualify
for the lower premium.
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