Compliance News | October 6, 2021
New guidance from the Departments of Health and Human Services, Labor and Treasury (collectively, the Departments) addresses coverage of COVID-19 vaccines under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The guidance also covers incentives under the HIPAA Nondiscrimination and HIPAA/ACA’s wellness program rules for individuals who receive COVID-19 vaccines as well as how to treat such incentives when assessing ACA coverage affordability.
The CARES Act requires non-grandfathered group health plans and health insurers to cover without cost sharing certain preventive services and immunizations that prevent or mitigate COVID-19. We discussed this requirement in our December 15, 2020 compliance insight, “Most Plans Must Cover COVID-19 Vaccine Without Cost Sharing.” The guidance addresses how these requirements apply to vaccines now authorized to prevent or mitigate COVID-19.
HIPAA prohibits plans and insurers from discriminating against participants, beneficiaries and enrollees in eligibility, premiums or contributions based on a health factor. There is an exception to this general prohibition, which permits a plan to offer incentives, including premium discounts, rebates or modification of otherwise applicable cost-sharing requirements in return for adherence with wellness programs. There are specific rules applicable to different types of wellness programs under HIPAA and the ACA. Plan sponsors have been interested in whether they can provide incentives to encourage participants to receive COVID-19 vaccines. The guidance speaks to how this can be done in a permissible manner.
The guidance, issued as FAQs, clarifies the following:
Plan sponsors must design activity-only health-contingent wellness programs to:
Plan sponsors should ensure their COVID-19 vaccine policies and practices comply with this guidance.
The FAQs note that the Departments will only enforce prospectively the requirement to cover immediately, without cost sharing, any COVID-19 vaccine authorized under an EUA or approved under a BLA. In some cases, plans may need to be amended to reflect this requirement.
Plan sponsors may wish to consider if they would like to provide wellness incentives to individuals for receiving the COVID-19 vaccination. If they decide to do so, they should ensure that such incentives are offered through a program that complies with the HIPAA/ACA wellness program rules governing activity-only health-contingent wellness programs. In addition, other rules governing wellness incentives, such as those issued by the Equal Employment Opportunity Commission under the Americans with Disabilities Act should be reviewed.
Finally, employers should monitor guidance from the administration, including for federal contractors or under OSHA, to ensure that they meet other applicable standards concerning vaccination.
This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.
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