Final Wellness ACA Anti Bias Rules Cost Sharing Subsidies

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Final Wellness ACA Anti Bias Rules Cost Sharing Subsidies
Calendar17 May 2016

Final disability and genetic nondiscrimination rules issued May 16 by the Equal Employment Opportunity Commission (EEOC) clarify how employer-sponsored wellness programs can condition incentives on an employee's or a spouse's undergoing a medical exam or disclosing details about current or past health status in response to disability-related inquiries. The rules, effective as of the first day of the plan year beginning in 2017, retain largely the same requirements as the original proposals, but the EEOC has clarified that the new rules apply to all employer-sponsored wellness programs — whether tied to or independent of any group health plan — that include medical exams or disability-related inquiries. EEOC continues to assert that employer wellness programs must satisfy these rules and cannot rely on the Americans with Disability Act’s statutory safe harbor for insurance underwriting and risk practices of benefit plans.

On May 13, the Department of Health and Human Services (HHS) published final ACA “Section 1557” nondiscrimination regulations. The rules give group health plans and insurers until the first plan or policy year starting on or after Jan. 1, 2017, to bring benefit designs into compliance. ACA Section 1557 broadly prohibits age, race, sex, disability, and national origin discrimination in any health program or activity that receives federal financial assistance. While that definition generally applies to organizations such as hospitals and health systems, even employer-sponsored plans that don't receive federal financial assistance may feel the impact if their insurer or third-party administrator has other health programs or activities that receive federal funds, such as public exchange subsidies.

Treasury payments to insurers — to cover reduced cost sharing available under the ACA to some individuals with health insurance from a public exchange — aren’t proper because Congress didn’t appropriate funds for that purpose, a District of Columbia federal district court has ruled (US House of Reps. v. Burwell). But Treasury can continue the payments until an appellate decision is reached, which will take some time. The lawsuit doesn't involve premium tax credits, which can trigger employer shared-responsibility assessments. While the lawsuit's final outcome is uncertain, an eventual House Republican victory could lead to higher exchange premiums and reduced enrollments, and may prompt some insurers to exit the public exchanges. Employers whose ACA strategies rely on the public exchanges will want to follow developments in the suit.

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