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Wellness Plans and Compliance with Additional Laws

The Department of Labor (DOL) recently released two FAQs regarding wellness plans and the requirement that they be reasonably designed and to provide caution that additional laws may apply when developing these plans.  

 

What do the FAQs say?

Topic of the FAQSummary of the FAQ
Health-contingent wellness plans must be reasonably designed

This FAQ discusses the need to ensure that a health-contingent wellness plan is reasonably designed. The regulations provide guidance on the reasonable design standard and state that a plan may meet these requirements if:

  • The plan has a reasonable chance of improving health or preventing disease.
  • The requirements of the wellness plan are not overly burdensome.
  • The wellness plan does not discriminate based on a health factor.
  • The wellness plan is not suspect in the method picked to promote health or prevent disease.
  • The wellness plan provides a reasonable alternative to qualify for the reward.

An unreasonably designed plan is: 

  • One that is designed to discourage enrollment in the plan by individuals who are sick or will have high claims.
  • A plan that collects a lot of personal health information without the goal of assisting with lifestyle changes (e.g., stop smoking, weight loss, and managing diabetes).
Compliance with the Americans with Disabilities Act, HIPAA, COBRA and IRS rules The second FAQ provides a warning that if the wellness plan meets the requirements under the wellness program regulations; this does not automatically mean that it complies with the Americans with Disabilities Act, HIPAA, COBRA and IRS rules. For example, reimbursement of fitness center fees, because it is not for reimbursement of a medical expense, should be included in income and should be added to the employees W-2 statement at year’s end.


To whom does this apply? 
This applies to all group health plans and insurers that are operating a wellness plan today. 

 

Is any action required to be in compliance?
Since these FAQs are providing clarification to existing standards, there is no action required of existing plans as long as their wellness programs were set up to meet the requirements. 

 

We encourage self-funded customers to consult their own legal and/or tax advisor about any questions they may have related to federal and state legal requirements that may apply to their group health plan.

 

Please contact your client relationship manager if you have any questions.

 

Compliance Quarterly is being provided as an informational tool. It is recommended that plans consult with their own experts or counsel to review all applicable federal and state legal requirements that may apply to their group health plan. By providing this publication and any attachments, Meritain Health is not exercising discretionary authority over the plan and is not assuming a plan fiduciary role, nor is Meritain Health providing legal advice.