Discrimination in Health Insurance Wellness Program Benefits

Your employer is allowed to give you discounts and benefits as part of the employer’s group health insurance programs. But what if you are too sick to participate?  Isn’t that illegal discrimination?

The government allows these wellness programs in order to reduce the burden of chronic illness, improve health, and limit growth of health care costs. There are two kinds of wellness programs, “participatory wellness programs” and “health-contingent wellness programs.”  Examples of participatory wellness programs are reimbursing the employee for fitness center dues or for getting diagnostic testing done, or rewarding the employee for attending a monthly health education seminar. Examples of health-contingent wellness programs include programs that provide a reward to those who do not use, or decrease their use of, tobacco, or programs that reward those who achieve a specified health-related goal such as a specified cholesterol level, weight, or body mass index.

So when your co-worker gets a reward for losing weight, isn’t that unfair to you if you are too sick to join an exercise program?  What if you have diabetes or a heart condition?

New government regulations put into effect on May 29, 2013 address the issue of discrimination.  The “participatory wellness programs” remain the same.  But the “health-contingent wellness program” rules are now modified.  In summary, they require companies to provide reasonable alternatives to employees who cannot meet health benchmarks, but who still want the discounts. They allow the employee to submit recommendations from the employee’s health care provider who can help tailor programs to meet the needs of their patients.

There are now new requirements for a health-contingent wellness program:

    1.  The program must give eligible individuals an opportunity to qualify for the reward at
least once per year.

    2.  The reward must not be more than 30 percent of the total cost of employee-only coverage under the plan.  But if it is a program designed to prevent or reduce use of tobacco, the percentage is raised to 50 percent.

    3. The reward must be available to all similarly situated individuals.  If it would be unseasonably difficult for an employee to participate due to a medical condition, or if it is medically inadvisable for the employee to participate, then a reasonable alternative must be made available to that employee.

    4.  The program must be reasonably designed to promote health or prevent disease.  It must have a reasonable chance of improving the health of, or preventing disease in, participating individuals, and not be overly burdensome. 

    5.  If obtaining the reward requires that the employee pass certain tests, measurements or screening, employees who do not meet the standard must be given an alternative means of qualifying for the reward.

Here are some examples as to how the program works:

Let’s say that your employer’s health plan charges you $4,500 per year for your health insurance premiums. The plan provides that you can enroll in a wellness program focused on exercise, blood sugar, weight, cholesterol and blood pressure.  If you participate, you will get a $600 reduction in your annual insurance premium.

This same plan is also allowed to charge an additional $2,000 annual premium to anyone who has used tobacco in the last year.  But if the employee agrees to attend a tobacco cessation program, this additional charge will be waived.

Another plan could provide that you get a $250 reward if you complete a health risk assessment.  You are entitled to the reward without regard to any health issues identified as a part of the assessment.  But if you then enroll in the plan’s Healthy Heart Program, you can earn another $1,500 reward. 

The medical information you give to the plan, as well as any test results obtained, are confidential.  As with all employer-sponsored health plans, your employer does not have the right to any of your medical information.  

The law firm of Kalijarvi, Chuzi, Newman & Fitch is very experienced in health insurance discrimination issues.  Please call us at 202-331-9260 to discuss your individual health insurance problem.

        – this blog entry was prepared by partner Elizabeth L. Newman.  You may reach her at enewman@kcnlaw.com