Ill. Admin. Code tit. 50, § 2001.9 - Prohibiting Discrimination Against Participants and Beneficiaries Based on Health Status
A group health plan or group health insurance issuer may vary benefits, including cost-sharing mechanisms (such as a deductible, copayment or coinsurance), based on whether an individual has met the standards of a wellness program that satisfies the requirements of subsection (f).
Nothing in this Section restricts the aggregate amount that an employer may be charged for coverage under a group health plan. But see 45 CFR 146.122(b), which prohibits adjustments in group premium or contribution rates based on genetic information.
However, a group health insurance issuer, or a group health plan, may not quote or charge an employer (or an individual) a different premium for an individual in a group of similarly situated individuals based on a health factor. (But see subsection (l) permitting favorable treatment of individuals with adverse health factors.)
Notwithstanding subsections (c)(1) and (c)(2), a plan or issuer may vary the amount of premium or contribution it requires similarly situated individuals to pay based on whether an individual has met the standards of a wellness program that satisfies the requirements of subsections (f) through (k). (45 CFR 146.121)
The requirements of this Section apply only within a group of individuals who are treated as similarly situated individuals. A plan or issuer may treat participants as a group of similarly situated individuals separate from beneficiaries. In addition, participants may be treated as two or more distinct groups of similarly situated individuals and beneficiaries may be treated as two or more distinct groups of similarly situated individuals in accordance with this subsection (d). Moreover, if individuals have a choice of two or more benefit packages, individuals choosing one benefit package may be treated as one or more groups of similarly situated individuals distinct from individuals choosing another benefit package.
Subject to subsection (d)(3), a plan or issuer may treat participants as two or more distinct groups of similarly situated individuals if the distinction between or among the groups of participants is based on a bona fide employment-based classification consistent with the employer's usual business practice. Whether an employment-based classification is bona fide is determined on the basis of all the relevant facts and circumstances. Relevant facts and circumstances include whether the employer uses the classification for purposes independent of qualification for health coverage (for example, determining eligibility for other employee benefits or determining other terms of employment). Subject to subsection (d)(3), examples of classifications that, based on all the relevant facts and circumstances, may be bona fide include full-time versus part-time status, different geographic location, membership in a collective bargaining unit, date of hire, length of service, current employee versus former employee status, and different occupations. However, a classification based on any health factor is not a bona fide employment-based classification unless the requirements of subsection (l) are satisfied (permitting favorable treatment of individuals with adverse health factors).
Notwithstanding subsections (d)(1) and (d)(2), if the creation or modification of an employment or coverage classification is directed at individual participants or beneficiaries based on any health factor of the participants or beneficiaries, the classification is not permitted under this subsection (d) unless it is permitted under subsection (g) (permitting favorable treatment of individuals with adverse health factors). Thus, if an employer modified an employment-based classification to single out, based on a health factor, individual participants and beneficiaries and deny them health coverage, the new classification would not be permitted under this Section. (45 CFR 146.121)
Under subsections (b) and (c), a plan or issuer may not establish a rule for eligibility (as described in subsection (b)(1)(B)) or set any individual's premium or contribution rate based on whether an individual is confined to a hospital or other health care institution. In addition, under subsections (b) and (c), a plan or issuer may not establish a rule for eligibility or set any individual's premium or contribution rate based on an individual's ability to engage in normal life activities, except to the extent permitted under subsections (e)(2)(B) and (e)(3) (permitting plans and issuers, under certain circumstances, to distinguish among employees based on the performance of services).
A wellness program is a program of health promotion or disease prevention. Subsections (b)(2)(B) and (c)(3) provide exceptions to the general prohibitions against discrimination based on a health factor for plan provisions that vary benefits (including cost-sharing mechanisms) or the premium or contribution for similarly situated individuals in connection with a wellness program that satisfies the requirements of subsections (f) through (k). The following definitions govern in applying the provisions of subsections (f) through (k):
Except where expressly provided otherwise, references in this Section to an individual obtaining a reward include both obtaining a reward (such as a discount or rebate of a premium or contribution, a waiver of all or part of a cost-sharing mechanism, an additional benefit, or any financial or other incentive) and avoiding a penalty (such as the absence of a premium surcharge or other financial or nonfinancial disincentive). References in this Section to a plan providing a reward include both providing a reward (such as a discount or rebate of a premium or contribution, a waiver of all or part of a cost-sharing mechanism, an additional benefit, or any financial or other incentive) and imposing a penalty (such as a surcharge or other financial or nonfinancial disincentive).
If none of the conditions for obtaining a reward under a wellness program is based on an individual satisfying a standard that is related to a health factor (or if a wellness program does not provide a reward), the wellness program is a participatory wellness program. Examples of participatory wellness programs are:
A health-contingent wellness program is a program that requires an individual to satisfy a standard related to a health factor to obtain a reward (or requires an individual to undertake more than a similarly situated individual based on a health factor in order to obtain the same reward). A health-contingent wellness program may be an activity-only wellness program or an outcome-based wellness program.
An activity-only wellness program is a type of health-contingent wellness program that requires an individual to perform or complete an activity related to a health factor in order to obtain a reward but does not require the individual to attain or maintain a specific health outcome. Examples include walking, diet or exercise programs, which some individuals may be unable to participate in or complete (or have difficulty participating in or completing) due to a health factor, such as severe asthma, pregnancy or a recent surgery. See subsection (h) for requirements applicable to activity-only wellness programs.
An outcome-based wellness program is a type of health-contingent wellness program that requires an individual to attain or maintain a specific health outcome (such as not smoking or attaining certain results on biometric screenings) in order to obtain a reward. To comply with the rules of subsections (f) through (k), an outcome-based wellness program typically has two tiers. That is, for individuals who do not attain or maintain the specific health outcome, compliance with an educational program or an activity may be offered as an alternative to achieve the same reward. This alternative pathway, however, does not mean that the overall program, which has an outcome-based component, is not an outcome-based wellness program. That is, if a measurement, test or screening is used as part of an initial standard and individuals who meet the standard are granted the reward, the program is considered an outcome-based wellness program. For example, if a wellness program tests individuals for specified medical conditions or risk factors (including biometric screening such as testing for high cholesterol, high blood pressure, abnormal body mass index, or high glucose level) and provides a reward to individuals identified as within a normal or healthy range for these medical conditions or risk factors, while requiring individuals who are identified as outside the normal or healthy range (or at risk) to take additional steps (such as meeting with a health coach, taking a health or fitness course, adhering to a health improvement action plan, complying with a walking or exercise program, or complying with a health care provider's plan of care) to obtain the same reward, the program is an outcome-based wellness program. See subsection (i) for requirements applicable to outcome-based wellness programs. (45 CFR 146.121)
A participatory wellness program, as described in subsection (f)(2), does not violate the provisions of this Section only if participation in the program is made available to all similarly situated individuals, regardless of health status.
A health-contingent wellness program that is an activity-only wellness program, as described in subsection (f)(4), does not violate the provisions of this Section only if all of the following requirements are satisfied:
The program must give individuals eligible for the program the opportunity to qualify for the reward under the program at least once per year.
The reward for the activity-only wellness program, together with the reward for other health-contingent wellness programs with respect to the plan, must not exceed the applicable percentage (as defined in subsection (j)) of the total cost of employee-only coverage under the plan. However, if, in addition to employees, any class of dependents (such as spouses, or spouses and dependent children) may participate in the wellness program, the reward must not exceed the applicable percentage of the total cost of the coverage in which an employee and any dependents are enrolled. For purposes of this subsection (h)(2), the cost of coverage is determined based on the total amount of employer and employee contributions towards the cost of coverage for the benefit package under which the employee is (or the employee and any dependents are) receiving coverage.
The program must be reasonably designed to promote health or prevent disease. A program satisfies this standard if it has a reasonable chance of improving the health of, or preventing disease in, participating individuals, and it is not overly burdensome, is not a subterfuge for discriminating based on a health factor, and is not highly suspect in the method chosen to promote health or prevent disease. This determination is based on all the relevant facts and circumstances.
The full reward under the activity-only wellness program must be available to all similarly situated individuals.
The plan or issuer must disclose in all plan materials describing the terms of an activity-only wellness program the availability of a reasonable alternative standard to qualify for the reward (and, if applicable, the possibility of waiver of the otherwise applicable standard), including contact information for obtaining a reasonable alternative standard and a statement that recommendations of an individual's personal physician will be accommodated. If plan materials merely mention that such a program is available, without describing its terms, this disclosure is not required. Sample language is provided in subsection (k), as well as in certain examples of this Section. (45 CFR 146.121)
A health-contingent wellness program that is an outcome-based wellness program, as described in subsection (f)(5), does not violate the provisions of this Section only if all of the following requirements are satisfied:
The program must give individuals eligible for the program the opportunity to qualify for the reward under the program at least once per year.
The reward for the outcome-based wellness program, together with the reward for other health-contingent wellness programs with respect to the plan, must not exceed the applicable percentage (as defined in subsection (j)) of the total cost of employee-only coverage under the plan. However, if, in addition to employees, any class of dependents (such as spouses, or spouses and dependent children) may participate in the wellness program, the reward must not exceed the applicable percentage of the total cost of the coverage in which an employee and any dependents are enrolled. For purposes of this subsection (i)(2), the cost of coverage is determined based on the total amount of employer and employee contributions towards the cost of coverage for the benefit package under which the employee is (or the employee and any dependents are) receiving coverage.
The program must be reasonably designed to promote health or prevent disease. A program satisfies this standard if it has a reasonable chance of improving the health of, or preventing disease in, participating individuals, and it is not overly burdensome, is not a subterfuge for discriminating based on a health factor, and is not highly suspect in the method chosen to promote health or prevent disease. This determination is based on all the relevant facts and circumstances. To ensure that an outcome-based wellness program is reasonably designed to improve health and does not act as a subterfuge for underwriting or reducing benefits based on a health factor, a reasonable alternative standard to qualify for the reward must be provided to any individual who does not meet the initial standard based on a measurement, test or screening that is related to a health factor, as explained in subsection (i)(4).
The full reward under the outcome-based wellness program must be available to all similarly situated individuals.
The plan or issuer must disclose in all plan materials describing the terms of an outcome-based wellness program, and in any disclosure that an individual did not satisfy an initial outcome-based standard, the availability of a reasonable alternative standard to qualify for the reward (and, if applicable, the possibility of waiver of the otherwise applicable standard), including contact information for obtaining a reasonable alternative standard and a statement that recommendations of an individual's personal physician will be accommodated. If plan materials merely mention that such a program is available, without describing its terms, this disclosure is not required. Sample language is provided in subsection (k), as well as in certain examples of this Section. (45 CFR 146.121)
For purposes of subsections (f) through (k), the applicable percentage is provided in Section 356z.17(e)(iii) of the Code.
The following language, or substantially similar language, can be used to satisfy the notice requirement of subsection (h)(5) or (i)(5): "Your health plan is committed to helping you achieve your best health. Rewards for participating in a wellness program are available to all employees. If you think you might be unable to meet a standard for a reward under this wellness program, you might qualify for an opportunity to earn the same reward by different means. Contact us at [insert contact information] and we will work with you (and, if you wish, with your doctor) to find a wellness program with the same reward that is right for you in light of your health status." (45 CFR 146.121)
Compliance with this Section is not determinative of compliance with any other provision of the PHS Act (including the COBRA continuation provisions) or any other Illinois or federal law, such as the Americans With Disabilities Act. Therefore, although this Section would not prohibit a plan or issuer from treating one group of similarly situated individuals differently from another (such as providing different benefit packages to current and former employees), other federal or Illinois laws may require that two separate groups of similarly situated individuals be treated the same for certain purposes (such as making the same benefit package available to COBRA qualified beneficiaries as is made available to active employees). In addition, although this Section generally does not impose new disclosure obligations on plans and issuers, this Section does not affect any other laws, including those that require accurate disclosures and prohibit intentional misrepresentation. (45 CFR 146.121)
This Section applies for plan years beginning on or after July 1, 2007.
Notes
Added at 38 Ill. Reg. 2037, effective January 2, 2014
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