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HIPAA prohibits group plans from charging higher premiums to individuals due to health status, medical history, genetic information, claims experience, receipt of care or evidence of disability. The Department of Labor's Employee Benefits Security Administration recently issued guidelines that closed off a loophole that might have allowed employers to charge less healthy workers higher deductibles.
A small number of employers have begun using supplemental insurance. Their wellness programs under the supplemental plan reward employees who reach certain health benchmarks with deductible discounts. An employee reaching a certain body mass index, for example, might receive a $500 deductible credit. Those who cannot meet the standard pay more.
Concerns over this design center on the possible discrimination of employees who cannot reach the benchmarks due to health status. Supplemental insurance is exempt from HIPAA, so the updated Department of Labor guidelines clarify what must be done to ensure there is no discrimination and to prevent supplemental insurance from becoming a HIPAA workaround. Programs that reimburse deductibles based on health objectives cannot sidestep HIPAA rules by claiming to be supplemental.
For example, a plan rewarding nonsmokers must allow a smoker (technically addicted to nicotine) to receive the same reward in alternative way, such as by participating in a cessation program.
Some design changes might be in order for existing programs to achieve compliance-most likely relating to the amount of the reward (which cannot exceed 20% of the cost of covering the employee), or the addition of alternative means to reach the rewarded health objective.
While it's probably tempting to reach for prepackaged programs that have already passed the compliance test, employers will also need to tailor programs to reduce their population's cost drivers.
There's another favor employers can do for their employees: Educate them on the logistics of their health insurance plans.
According to a survey commissioned by eHealth Inc., the parent company of eHealthInsurance, most consumers lack a basic understanding of even the most common health insurance concepts. Few pay attention to their own coverage.
The survey reports that:
Consumers' lack of understanding might lead them to choose a poorly suited coverage plan for their families, the drawbacks of which cannot be offset by even the most innovative reward programs.
Julie Miller is editor-in-chief of MANAGED HEALTHCARE EXECUTIVE. She can be reached at firstname.lastname@example.org