Discounts Must Offer Options
GRAND RAPIDS — Wellness programs that seem to favor healthy and fit people over those who have medical conditions or a family history of poor health may run into legal problems if they do not follow certain guidelines, said Mary Bauman, a partner at Miller Johnson who specializes in employee benefits and executive compensation.
“The philosophical argument to me is obviously we want to encourage people to have healthy lifestyles, but what if they can’t have a healthy lifestyle because they have a medical condition or a family history?” she asked.
The legal answer is that companies cannot have a bona fide wellness program that gives employees a discount on their health-care costs unless it is inclusive.
“If you want to have a wellness program which would somehow have different cost-sharing arrangements for people based on health factors, you have to jump through certain hoops, because if you don’t jump through those hoops, you violate the law,” she said.
If a company wants to offer a discount or rebate on the premium or co-pay based on body mass index, cholesterol levels or other health factors, there are requirements for the company. The program has to be made available at least once a year, and the discount on health-care costs cannot exceed 20 percent of the cost of a single person covered under the employer’s health plan for the year. There also have to be different ways for people to participate in the program.
“You have to offer reasonable alternatives for people who maybe can’t satisfy that criteria because they have a medical condition or it’s medically inadvisable to satisfy the condition,” she said.
According to the U.S. Department of Labor Employee Benefits Security Administration, the program must be “reasonably designed to promote good health or prevent disease for individuals in the program,” allow employees to satisfy an alternative standard, and disclose the availability of those alternatives.
If an employee smokes and therefore is not eligible for a non-smoking discount, they need to be given the same discount if they enroll in a smoking cessation class, for example.
Employers need to work with their employees to develop accommodations, if necessary.
“Everyone has to be able to qualify somehow,” Bauman said.