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Wellness Programs

Guest Nini

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This request is being posted under Cafeteria Plans, Health Plans and Welfare Plans in hope of getting a response.

We have a client with a health flexible spending account that is considering establishing a tobacco cessation program – those that certify that they do not/will not use tobacco products will receive an employer contribution to the health fsa. Following research and discussion with the client, we have the following questions –

1. Does a program that rewards its participants based on the criteria that they do not/will not smoke have to be considered a wellness program? Could it be a stand alone employer- sponsored plan/program/benefit that provides for employer contributions into an employee’s FSA account if the employee certifies that s/he does not/will not smoke? Can the employer use non-smoking as its criteria for the reward without concern of a discrimination issue? Is there a way around the discrimination issue? Would there need to be a reasonable alternative to the certification in order for smokers to qualify for the reward? If the employer did not offer a reasonable alternative to the certification, but offered a smoke cessation program through its health plan, would this suffice?

2. If such a program does not have to be considered a wellness program, what would it be and pursuant to which regulations would it be established?

3. If such a program could not stand alone, would it have to be linked to the employer’s group health plan? Could it be linked to the FSA? If this program had to be considered a wellness program and HIPAA applied, and the program was linked to the FSA, what could we use as the cost of coverage to satisfy the requirement that the reward not exceed 20 percent of the cost of coverage?

4. If we wanted to offer the program to all employees, not just those participating in the health plan/FSA, and if we did not make the certification a condition of employment, how could we open the program up to all employees?

5. If the program sponsor were to make a determination that an employee who received the reward falsified the certification, can the employer cease additional contributions to such employee? Request and demand that such employee repay the prior contributions? Can the money be withheld from the employee’s pay? Can the employer cease the employee’s participation in the FSA plan? In the health plan?

6. What types of safeguards do wellness program sponsors have in place to determine/monitor that participants are being honest? Is there an appeals process when an employee’s honesty has been challenged?

7. How does the requirement to provide a terminated participant with a certificate of creditable coverage if s/he received employer contributions in excess of $500 negatively impact the program?

These are the remaining questions we have after reading the final HIPAA regulations. If you are aware of any research material or if you have any experience in this area, your assistance is greatly appreciated.


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