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| HIPAA Compliance Is Good for Your Fiscal Health |
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| The Health Insurance Portability and Accountability Act of 1996 (HIPAA) provides rights and protections for participants and beneficiaries in group health plans. HIPAA limits exclusions for preexisting conditions, prohibits discrimination against employees and dependents based on their health status, and allows a special opportunity to enroll in a new insurance plan to individuals in certain circumstances. |
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| HIPAA’s Three Sections |
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Title I states that insurers must renew coverage to all groups and accept new employees into their health plans, regardless of the health status of any family member; and prohibits group health plans from denying coverage because of mental illness, genetic information, disability, or previous claims.
Title II requires that each covered entity that maintains or transmits health information electronically develop, implement, and maintain measures to protect that information.
Title III establishes standards to protect electronically transmitted health information. |
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 - HIPAA Compliance Guidance |
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New regulations recently took effect that will clarify how a company can implement nondiscriminatory wellness programs and offer guidance for group health plans. The provisions, which are effective on the first day of the plan year beginning or after July 1, make it unlawful for group health plans to charge different premiums, contributions, or impose different deductibles, copayments, etc., from people in similar situations based on health reasons. The exception is wellness plans. The new regulations state that wellness programs that offer a reward based on an individual satisfying a standard related to a health factor must meet the following 5 requirements:
- There must be a limit to the total reward.
- The program must be reasonably designed to promote good health or prevent disease.
- The program must give eligible individuals the opportunity to qualify for the reward at least once per year.
- The program must provide a reasonable alternative standard for obtaining the reward for certain individuals for whom it is unreasonably difficult due to a medical condition or medically inadvisable to satisfy the otherwise applicable standard.
- The plan must disclose that a reasonable alternative standard will be made available and all plan materials the describe the general standard must provide this disclosure.
The final regulations also list the types of programs that would not have to meet any additional standards to comply with the nondiscrimination requirements. They are:
- A program that reimburses all or part of the cost for memberships in a fitness center.
- A diagnostic testing program that provides a reward for participation and does not base any part of the reward on outcomes.
- A program that encourages preventive care through the waiver of the copayment or deductible requirement under a group health plan for the costs of, for example, prenatal care or well-baby visits.
- A program that reimburses employees for the costs of smoking cessation programs without regard to whether the employee quits smoking.
- A program that provides a reward to employees for attending a monthly health education seminar.
For more information about HIPAA compliance, click here to download a free HR compliance report.
 WEBCAST: Are You at Risk for HIPAA Violations?
DOWNLOAD: HIPAA Privacy Rule Compliance Checklist
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$50,000 and one year in prison for obtaining or disclosing protected health information. |
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$100,000 and up to five years in prison for obtaining protected health information under false pretenses. |
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$250,000 with up to 10 years in prison for obtaining or disclosing protected health information with the intent to sell, transfer, or use it for commercial advantage, personal gain, or malicious harm. |
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