The Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (collectively, the Departments) recently issued FAQs addressing rules regarding premium incentives for COVID-19 vaccinations and rapid coverage of preventive services for COVID-19.
Incentives for Receiving a COVID-19 Vaccination Must Comply with HIPAA’s Wellness Program Nondiscrimination Rules
The FAQs clarify that a group health plan (or health insurance issuer offering coverage in connection with a group health plan) may offer participants a premium discount for receiving a COVID-19 vaccination. However, any discount must comply with the final wellness program rules.
Under these rules, a premium discount that requires an individual to obtain a COVID-19 vaccination would be considered an activity-only wellness program, which is a type of health-contingent wellness program. As such, all of the following requirements must be satisfied:
- The program must give individuals eligible for the program the opportunity to qualify for the reward under the program at least once per year;
- The reward for the activity-only wellness program, together with the reward for other health-contingent wellness programs with respect to the plan, must not exceed the applicable percentage (defined as 30 percent of the total cost of employee-only coverage under the plan;
- The program must be reasonably designed to promote health or prevent disease;
- The full reward must be available to all similarly situated individuals (which includes allowing a reasonable alternative standard (or waiver of the otherwise applicable standard) for obtaining the reward for any individual for whom, for that period, it is unreasonably difficult due to a medical condition or medically inadvisable to satisfy the otherwise applicable standard; and
- The plan or issuer must disclose in all plan materials describing the terms of an activity-only wellness program the availability of a reasonable alternative standard to qualify for the reward (and, if applicable, the possibility of waiver of the otherwise applicable standard), including contact information for obtaining a reasonable alternative standard and a statement that recommendations of an individual’s personal physician will be accommodated.
It is important to note that compliance with the wellness program final regulations isn’t necessarily determinative of compliance with other laws, including the Americans with Disability Act (ADA) and the Genetic Information Nondiscrimination Act (GINA). Furthermore, these FAQs address program incentives provided by group health plans and health insurance issuers and do not address incentives offered by employers as part of workplace policies that are unrelated to their group health plan.
Group Health Plans May Not Condition Eligibility for Benefits on Enrollees Being Vaccinated
Plans and issuers are generally prohibited from discriminating against participants, beneficiaries, and enrollees in eligibility, premiums, or contributions based on a health factor, including whether or not an individual obtains a COVID-19 vaccination (the exception being for wellness programs meeting the criteria discussed above).
Treatment of Premium Discounts and Surcharges for Purposes of the ACA’s Employer Shared Responsibility Affordability Requirements
Wellness incentives that relate to the receipt of COVID-19 vaccinations are treated as not-earned for purposes of determining whether employer-sponsored health coverage is affordable. Thus, a premium discount for receiving the COVID-19 vaccination is disregarded for purposes of determining whether the coverage offered to that individual is affordable, but a surcharge assessed to a non-vaccinated individual has the effect of increasing the cost of coverage in determining affordability.
Rapid Coverage of Preventive Services for COVID-19
Effective January 5, 2021, plans and issuers must cover, without cost sharing, any COVID-19 vaccines and their administration immediately once the particular vaccine becomes authorized under an emergency use authorization (EUA) or approved under a biologics license application (BLA). This coverage must be provided consistent with the scope of the EUA or BLA, including any amendment, such as to allow for an additional dose to certain individuals, booster doses or the expansion of the age demographic for whom the vaccine is authorized or approved.
For additional information, please contact your Burnham Benefits Consultant or Burnham Benefits at 949‐833‐2983 or firstname.lastname@example.org.
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