The 5 Criteria for HIPAA Compliance in Wellness Programs

Written by benefitexpress | August 23, 2016

Criteria for HIPAA Compliance in Wellness Programs 

We’ve discussed how adding a Health Risk Assessment can further increase the ROI of your wellness program. By using a health screening, you can help your employees target key health risks to address over the course of your wellness plan. However, activities like this make your wellness program a health-contingent wellness program, which means your plan is more regulated than other wellness programs. Health-contingent programs especially must meet 5 criteria to ensure they remain HIPAA compliant.

What exactly is a health-contingent program?

A health-contingent wellness program requires individuals to satisfy a standard related to a health factor as a condition for obtaining a reward. In this case, a reward includes an incentive (such as a discount in healthcare costs or a gift) and avoiding a penalty. Health-contingent programs can be either activity-only or outcome-based. An activity-only program requires a participant to complete a health factor-related activity (i.e. participating in an exercise plan) to obtain the reward. An outcome-based program requires a participant to attain or maintain a specific health outcome (like not smoking or reaching/maintaining a certain Body Mass Index).

What requirements must plans meet?

Health-contingent wellness programs must meet five requirements to be exempt from HIPAA nondiscrimination provisions.

  1. The reward must be no more than 30% of the cost of coverage – This includes a discount, premium or contribution rebate, or a waiver of any similar cost-sharing mechanism. This amount goes up to 50% if related to tobacco use.
  2. The program must be reasonably designed to promote health or prevent disease – The program must have a reasonable chance of improving the health of or preventing disease in participants, is not overly burdensome, is not a subterfuge for discriminating based on a health factor, and is not highly suspect in the method chosen.
  3. The program must give individuals an opportunity to qualify for the reward at least once a year – A program may offer more frequent opportunities, just not less frequent.
  4. The reward must be available to all similarly situated individuals – This means that both the general health-contingent for grouping “similarly situated individuals” must be satisfied and that a reasonable alternative generally must be provided. ‘Similarly situated’ allows groups of individuals to be treated as distinct ‘similarly situated’ participants. For example, a plan could be available to full-time employees but not part-time, or to employees but not their spouses.
  5. The plan must disclose that alternative health-contingents (or waivers) are available For some employees, it may be medically inadvisable to complete your wellness program. In this case, they must be given an opportunity to complete a different, reasonable alternative. Generally, this alternative will be suggested by an individual’s healthcare provider. You do not have to disclose the exact alternatives, just that they are available.

Creating a wellness program is a great way to engage your employees while lowering health care costs. Showing your employees their information will only be used in compliance with HIPAA is a great way to allay any fears they may have. This will boost participation and ensure a successful wellness program.

Topics: HIPAA, Health & Wellness