Most of the conversation around workplace wellness compliance has focused on federal law compliance, such as with HIPAA, ACA, ADA, and GINA. But some states have also enacted laws that are important to workplace wellness program compliance. This blog post will highlight two state laws and examine whether more such laws are needed.
New York Insurance Law § 3239 allows insurers, companies and municipal cooperative health benefits plans in New York to establish “wellness programs” in conjunction with group health insurance. The law defines “wellness programs” as those designed to “promote health and prevent disease that may contain rewards and incentives for participation.” The law requires participation to be available to “similarly situated members of the group and to be voluntary on the part of the member. Id. The similarly situated requirement mirrors the health contingent provisions under the federal Affordable Care Act wellness incentive law (45 CFR Part 146). The “voluntary” requirement mirrors the “voluntary” requirement under the federal Americans with Disabilities Act (ADA) under 42 USC § 12112(d)(4)(B).
Although the New York law allows use of rewards and incentives for wellness program participation, it prohibits group health insurance policies or subscriber contracts that must be community-rated to use discounted premiums or rebates or refunds of a premium as the reward. NY ISC § 3239(c)(1).
For those health plans that are not community-rated and that use a discounted premium rate or rebate/refund of premium as the wellness reward, that discount/rebate/refund must be “based on actuarial demonstration that the wellness program can reasonably be expected to result in the overall good health and wellbeing of the group.” NY ISC § 3239(c)(4). This means that the wellness program must be able to prove that the wellness program will actually achieve better health and wellbeing of the health plan group members. This legal requirement that the wellness program actually achieve better health outcomes is profound and unique among state and even federal wellness laws. Of course, this only applies to New York based, non-community-rated group health plan wellness programs that use premium discounts/refunds/rebates as the wellness incentive. But, as more employees push back against workplace wellness programs, more states may adopt similar wellness laws.
Massachusetts has a law that applies to Certified Group Purchasing Cooperative Wellness Programs (or entities that contract with such cooperatives). See 211 CMR 115.15. Massachusetts law defines “Group Purchasing Cooperative” as either: 1) a nonprofit; or 2) an association of entities organized for the purpose of advancing the occupational, professional, trade, or industry interests of Association members, and who also negotiate health plans for their respective members. 211 CMR 115.
The Massachusetts law has the following legal requirements for Group Purchasing Cooperative wellness programs:
See 211 CMR 115.
The statute defines “eligible small business” to include a sole proprietorship, firm, corporation, partnership, or association actively engaged in business which, on at least 50% of its working days during the preceding year, employed from among one to not more than 50 Eligible Employees, the majority of whom worked in Massachusetts. See 211 CMR 115.03.
The Massachusetts law, though limited to whom it applies, is quite prescriptive when it comes to what a workplace wellness program should look like. The Massachusetts law goes way beyond federal Affordable Care Act wellness incentive rules, which offer more flexibility to employers as to what constitutes a “reasonably designed” wellness program. Even more unique is the requirement that the program be evidence-based and that the HRA must be accredited by the NCQA.
Should More States Adopt Workplace Wellness Laws like New York and Massachusetts?
It is interesting that both New York and Massachusetts require evidence that the wellness program is achieving results. Massachusetts’ law goes even further, requiring qualified personnel in the design and delivery of the wellness program, and NCQA accreditation for the HRA tool. Because current federal laws do not dictate these standards for wellness programs, it may be up to each state to determine whether they should follow Massachusetts’ lead in requiring wellness programming to meet certain standards.
The debate around implementing standards in wellness is an emerging one. On the one hand, standards means more barriers to entry; it will be more difficult for everyone to meet certain standards in order to practice wellness. Right now, wellness is the wild west with very little, if any, oversight. On the other hand, standards can help ensure that wellness services are provided competently and safely. Massachusetts even requires that HRA data is kept confidential, which is a typical concern expressed by employees who have sued workplace wellness programs. In other words, adopting objective, evidence-based standards in wellness can reduce legal risk; employers who adopt wellness programs that meet certain standards set by a credible, objective source have a more compelling defense if something should go wrong with the wellness program. Moreover, standards could incorporate results-oriented measures and activities, giving wellness program participants and sponsors assurance that their money and time is well spent.
Although Massachusetts is unique in requiring NCQA accreditation for HRAs, forty-two wellness vendors have achieved NCQA accreditation or certification for a wellness program component, or the whole program. What NCQA does not do, however, is accredit or certify the wellness practitioner. That is also a good idea, and would assist states that want to adopt objective standards for wellness services. There are some good candidates, with National Wellness Institute’s Certified Wellness Professional being one standard bearer for more comprehensive wellness service offerings.
As the debate on whether wellness needs standards continues, it is important to understand that standards like those set by New York and Massachusetts can give everyone involved in wellness more confidence that it can achieve positive results.
If you would like to understand your state’s workplace wellness program laws or need wellness program compliance assistance, please contact Wellness Law, LLC, which specializes in wellness compliance services.