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Employee rights under HIPAA/ACA
  • Company wellness programs connected to a group health plan must comply with HIPAA/ACA requirements.

The Health Insurance Portability and Accountability Act (HIPAA) regulations, as amended by the Affordable Care Act (ACA), impact wellness programs that are part of a group health plan with respect to rewards offered for participating in the program. The regulations also have privacy provisions that must be followed.

  • Rewards: HIPAA/ACA regulations generally prohibits group health plans from charging similarly situated individuals different premiums or contributions or imposing different deductibles, copayment, or other cost sharing requirements based on a health factor. However, there is an exception for wellness programs.

The HIPAA/ACA rules allow employers to reward or penalize employees for meeting certain health goals (such as not smoking, or attaining a certain level of blood pressure), but there are strings attached. The company needs to keep penalties within certain limits. Penalties cannot be over 30 percent of the cost of coverage, or 50 percent of the cost of coverage if the penalty relates to smoking. Employers must also offer a reasonable alternative if an employee does not meet the requirements for a reward, and employees need to be allowed to qualify at least annually.

  • Privacy: In addition, under HIPAA, a company needs to be careful with any personally identifiable health information. HIPAA protects individually identifiable health information held by the group health plan, which is a covered entity under HIPAA, and also protects the personal health information that an employer holds in its role as plan sponsor when it is administering the wellness benefits offered through the plan. An employer must ensure privacy and make sure there are firewalls in place to protect the information.