Actively at Work/HIPAA

[Christine Roberts]

Didn't recent regulations under HIPAA address whether requiring an employee to be "actively at work" in order to be eligible for health coverage would constitute a violation of HIPAA's discrimination provisions? I cannot find any discussion of this issue but have a clear recollection of it being addressed at some point.

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[Brigid Anderson]

I am not aware of any formal guidance on whether actively at work clauses violate HIPAA's nondiscrimination rules. Certain employers have modified their clauses to clarify that they apply only where an employee is not absent on account of health status (one of the bases on which discrimination if prohibited). However, at the April 3, 1998 Annual Conference of the Employers Council on Flexible Compensation (ECFC), Russell Weinheimer, an attorney with the IRS, commented that even such a limited provision would likely be deemed to violate HIPAA.

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[Guest Patricia Ibbs]

No, the regulations for HIPAA did not address "actively at work" clauses. The IRS has come out with informal guidance (carries no weight in law, but indicates how the regulators feel about the issue) that actively at work clauses may be a subterfuge for requiring a person to be healthy enough to get to work and therefore, impermissable under HIPAA (health status-related factor).

I think most plans have dropped this language, especially the part about requiring an employee to be in the workplace before coverage starts.

My company writes SPDs and we have substituted "active employee"--a requirement that the person be on the "regular payroll of the Employer and who is scheduled to perform the duties of his or her job with the Employer on a full-time or part-time basis." This is when the waiting period/enrollment date/whatever starts. This was one of the reasons for actively at work clauses--you knew when people started work "officially," so you could start counting days for various benefits purposes. (The main reason, of course, was that the plan would not be covering employees too sick to get to work--precisely what the IRS doesn't like.)

I asked Russ Weinheimer, the IRS HIPAA regulation writer, (at a conference in the Q&A period) if the rewritten language sounded as if it would pass HIPAA muster and he said it sounded okay to him.