The Equal Employment Opportunity Commission (EEOC) has written an informal discussion letter clarifying how the EEOC’s recent regulations on wellness program incentives under the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA) apply to a group health plan with multiple coverage options. This EEOC guidance regarding calculation of incentive limits brings to light additional disparity between ADA/GINA and wellness program regulations under the Health Insurance Portability and Accountability Act (HIPAA) as amended by the Affordable Care Act (ACA).
As we reported in a May 2016 Trion HCRAlert!, unlike HIPAA regulations that apply only to wellness programs linked to employer health plans which provide rewards related to health factors, the ADA/GINA regulations apply to all employer-sponsored wellness programs that request health information from employees or family members – both participation-based and outcome-based and regardless of whether participation is conditioned on enrollment in an employer health plan. Under the ADA, programs that make disability-related inquiries or require medical examination of employees can offer incentives of up to 30% of the total cost of self-only coverage. Additionally, under GINA, programs can offer incentives of up to 30% of the total cost of self-only coverage for health status information or medical examinations from spouses.

The ADA and GINA regulations outline essentially identical guidelines for identifying the coverage upon which incentive limits must be calculated, which is the total cost of self-only coverage under:

· The lowest cost group health plan, if more than one group health plan is offered but enrollment in a particular plan isn’t a condition for participation in the wellness program;

· The group health plan, if a single group health plan is offered but enrollment in the plan isn’t a condition for participation in the wellness program;

· The group health plan in which an employee is enrolled, if

· The 2nd lowest cost Exchange Silver Plan available for a 40-year-old non-smoker in the employer’s principal place of business, if no group health plan is offered.
For certain situations the guidance is clear. However, it is ambiguous whether rule A or rule C above would apply if:

· An employer offers more than one group health plan and wellness program participation is contingent upon enrollment in “a plan”, but not “a particular plan”; or

· An employer offers a single group health plan with multiple benefit options and wellness program participation is contingent upon enrollment in “the plan”, but not a particular benefit option.
The EEOC’s discussion letter is response to a request for clarification on these specific points and it indicates that, if multiple benefit options are offered (regardless of whether offered in multiple plans or as multiple options within a single plan) and wellness program participation is not contingent upon enrollment in a specific benefit option, the incentive limit is determined based on the lowest cost benefit option rather than the benefit option in which the employee is enrolled. The EEOC acknowledges this outcome is different than what is permissible under HIPAA, which calculates incentive limits based on the plan in which an employee is enrolled, but asserts that its interpretation promotes consistency within the wellness program by making the incentive limit the same for all employees and that the end result balances a desire for consistency between the ADA/GINA and HIPAA statutes with the need to ensure that incentives are not coercive.

The ADA/GINA rules are applicable for plan years beginning on or after January 1, 2017. Employers whose wellness programs will be subject to the rules should ensure their wellness program incentives are in alignment with this EEOC guidance prior to finalizing health care benefits and wellness program strategies for the 2017 plan year.

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Your Trion Strategic Account Managers are here to answer any questions you might have as you prepare to comply with upcoming ACA requirements. If you are not currently a Trion client and would like assistance navigating the changes required by health care reform, please contact us today [email protected]

ACA Regulations & Guidance Issued In the Last Two Months

Sep. 2016:

EEOC Issues Informal Letter Clarifying Wellness Incentive Limits For Employers With Multiple Coverage Options

Aug. 2016:

HHS Issues Notice of Benefit and Payment Parameters for 2018 Proposed Rule and Fact Sheet

Aug. 2016:

IRS Issues 2016 Draft Information Reporting 1094-B, 1095-B, B Form Instructions, 1094-C, 1095-C, C Form Instructions & Draft Test Package for Electronic Filers

Aug. 1026:

IRS Issues Proposed Rule on 6055 Information Reporting Requirements

About Trion Group, a Marsh & McLennan Agency, LLC (Trion) HCRAlert!

This content is provided by Trion Group, a Marsh & McLennan Agency, LLC Company (Trion) in collaboration with our compliance partner, Marathas, Barrow and Weatherhead LLP (“MB&W”), a premier employee benefits, executive compensation and employment law firm. The information provided in this alert is not, is not intended to be, and shall not be construed to be, either the provision of legal advice or an offer to provide legal services, nor does it necessarily reflect the opinions of Trion, our lawyers, or our clients. This is not legal advice. No client-lawyer relationship between you and our lawyers is or may be created by your use of this information. Rather, the content is intended as a general overview of the subject matter covered.

While Trion and MB&W strive to ensure the accuracy and completeness of these alerts, the publisher, authors, editors, and contributors of the contents are not responsible for any errors or omissions and are not obligated to provide updates on the information presented herein. Trion and MB&W do not control or guarantee the accessibility, accuracy, relevance, timeliness, or completeness of outside information for which links may be provided, nor do we endorse any views expressed or products or services offered by such organization or authors.

The Patient Protection and Affordable Care Act (“PPACA”) is a complex law. Any statements made by Trion concerning tax, accounting, or legal matters are based solely on our experience as insurance brokers and risk consultants and are not to be relied upon as accounting, tax, or legal advice. Those reading this alert are encouraged to seek direct counsel from your own tax, accounting and legal advisers as to whether your policies and procedures, health plans, and employee contribution requirements are compliant with the PPACA and with any other questions you have regarding this law.

© 2016 Trion Group, a Marsh & McLennan Agency, LLC Company. All Rights Reserved.
© 2016 Marathas Barrow & Weatherhead LLP. All Rights Reserved.

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