Two recent court decisions offer insight for employers on when a complaint about a tobacco wellness program might lead to litigation. In the Chirinian v Travelers decision, the court determined the employer complied with most of HIPAA’s wellness rules but was missing language in its ERISA summary plan description (SPD). In the Buescher v. North American Lighting decision, the court determined the employer complied with most of HIPAA’s wellness rules and dismissed all of the plaintiff’s claims, with the exception of a complaint that the notice of a reasonable alternative was not adequate.
Applies To: Any size employer with a health plan incentive tied to tobacco status.
Go Deeper:
For employers offering health plan incentives tied to tobacco status, ERISA, ACA, and HIPAA all provide a framework employers can follow to avoid liability for discriminating against someone based on a health factor (tobacco use). There are language and notice requirements, incentive limits, a requirement to provide an annual opportunity to qualify, and a requirement to provide a reasonable alternative standard to earn the same full-year incentive, whether or not an individual quits tobacco.
In the first case, Travelers complied with all these rules except one. While most health plans describe their wellness programs and incentives in a benefit guide and/or in dedicated wellness program materials, Travelers also includes information about the wellness program in their ERISA summary plan description (SPD). However, the court held that all plan materials describing the wellness program and incentive must address all aspects of being able to request a reasonable alternative, including the option for the participant to ask the employer to create a reasonable alternative with the help of their personal physician. Travelers’ SPD did not mention the ability to work with their personal physician as an option, so that complaint was not dismissed.
In the second case, the North American Lighting incentive program complied with most of HIPAA’s requirements, but they did not respond to the part of the complaint alleging their failure to provide a notice of a reasonable alternative, so that complaint was not dismissed.
Practical Impact to Employers:
It is important when sponsoring wellness programs to not only design them well with reasonable alternatives, but also to provide required notices and to ensure all plan materials describing the program and incentives include all required language. A lawsuit can ensue simply for missing a required statement.