New HIPAA Rules Cover Wellness Programs

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Final regulations issued by the US Departments of Treasury, Labor, and Health and Human Services dealing with employer-sponsored wellness programs become effective on July 1, 2007.  The Health Insurance Portability and Accountability Act (HIPAA) may cover such programs. Among other things, HIPAA prohibits discrimination against health plan participants with respect to eligibility, premiums, and contributions based on an individual’s “health factors.” Regulations will require employers to provide “reasonable alternatives” for people with physical or mental conditions. However, programs under which none of the conditions for obtaining an incentive reward is based on an individual satisfying a standard related to a health factor or where no award is given meet the nondiscrimination standard.  As such, nicotine addiction may require an award whether the individual successfully quits smoking or not.