FAQs About The HIPAA Nondiscrimination Requirements Under HIPAA, an individual cannot be denied eligibility for benefits or
charged more for coverage because of any health factor. What are the “health
factors”?
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. Can a group health plan require an individual to pass a physical
examination in order to be eligible to enroll in the plan? Can a plan require an individual to complete a health care
questionnaire in order to enroll? Can plans exclude or limit benefits for certain conditions or
treatments? 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). Can a plan deny benefits otherwise provided for the treatment of an
injury based on the source of that injury? 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. Can a plan charge individuals with histories of high claims more than
similarly situated individuals based on their claims experience? How are groups of similarly situated individuals determined? 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. Is it permissible for a health insurance issuer to charge a higher
premium to one group health plan (or employer) that covers individuals,
some of whom have adverse health factors, than it charges another group
health plan comprised of fewer individuals with adverse health factors? Can a health insurance issuer charge an employer different premiums for
each individual within a group of similarly situated individuals based on
each individual’s health status? 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. Can a group health plan impose a nonconfinement clause (e.g., a clause
stating that if an individual is confined to a hospital at the time
coverage would otherwise take effect, coverage would not begin until that
individual is no longer confined)? Can a group health plan impose an “actively-at-work” provision
(e.g., a requirement that an employee be actively at work after a waiting
period for enrollment in order to have health coverage become effective on
that day)? 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. Is it permissible for a group health plan that generally provides
coverage for dependents only until age 25 to continue health coverage past
that age for disabled dependents? Are wellness programs allowed under HIPAA’s nondiscrimination rules? 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:
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. What are the five requirements for wellness programs which base a reward on satisfying a standard related to a health factor?
How do the wellness program rules apply to a group program that offers
a reward to individuals who participate in voluntary testing for early
detection of health problems? The plan does not use the test results to
determine whether an individual receives a reward or the amount of an
individual’s reward. Can a plan provide a premium differential between smokers and
nonsmokers? 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:
|
|