How strict can the ER be when offering premium discounts to healthy individuals, or to those who are trying to achieve better health through various programs?

[katieinny]

The ER currently offers discounts to employees who don't smoke, are within normal weight ranges and have good cholesterol and blood pressure readings. The same discounts are also offered to those employees who are not in such good shape, but are or were in programs or under a doctor's care to help them achieve success in these areas.

Can the ER say that the discount will only be available AFTER success has been achieved? If not, can the ER say that the discount will only be available for as long as the employee remains in a program or under a doctor's care? Or can the ER insist on a certain number of documented attempts to achieve success?

[Kirk Maldonado]

I think that you may have some potential issues regarding the ADA that deserve serious attention.

[katieinny]

I assume you're talking about the Americans with Disabilities Act. Do you mean issues with regard to the way the plan is currently set up, or do you mean if they impose the one or more of the restrictions mentioned in my second paragraph?

[Guest BenefitsLawyer]

There are also HIPAA non-discrimination/bona fide wellness program issues. See proposed regs at 66 Fed. Reg. 1421 (1/8/01).

[Kirk Maldonado]

Both.

[Steve72]

As has been pointed out, there are significant compliance issues (under both the ADA and HIPAA) for the program you describe. It sounds like you're trying to meet the requirements of a bona fide wellness program. To answer your specific questions, you CANNOT condition the discount on success in the program.

You must also offer "alternative means" of satisfying the requirements for individuals who cannot satisfy the current requirements of the program.

[KIP KRAUS]

It sounds as though you are applying individual underwriting policies to group insurance plans. Do the people who don't smoke, are within normal weight ranges and have good cholesterol and blood pressure readings drive racecars on the weekends, sky dive, drink excessively, fly airplanes, or do any other risky activities?

Can you guarantee that dependents don’t have medical problems? From a group medical plan underwriting standpoint it doesn’t make sense to offer discounts to seemingly healthy employees since you can’t guarantee that they, or their dependents will not have an accidental injury or contract an unforeseen disease.

Good idea, but misguided in my opinion. In addition, as judicially pointed out by Kirk you may have ADA issues. In addition, you may have ADE issues.