Seyfarth Synopsis: We previously discussed how to apply the HIPAA wellness rules to a premium differential based on a participant's vaccination status in our Legal Update. At the time, we were left to interpret the existing rules to the brave new world of COVID-19 vaccination incentive programs. Well, the Departments of Labor, Health and Human Services, and Treasury have now weighed in.  FAQs about Affordable Care Act Implementation Part 50, Health Insurance Portability and Accountability Act and Coronavirus Aid, Relief, and Economic Security Act Implementation (dol.gov) And, fortunately, our analysis held up. See below for highlights of the FAQs.

What Kind of Wellness Program Is It? 

The agencies confirmed that a plan may impose a premium differential based on vaccination status if it complies with the HIPAA wellness plan rules. In this regard, the agencies confirmed that a premium differential based on vaccination status will be a "health-contingent activity-only" wellness program. Recall that there was some debate about whether such a program would be "participatory only" or whether it might even be considered a "health-contingent outcomes-based"  wellness program. While the agencies did not go into any deep analysis, at the time we based our view that the program would be "activity-only" on the fact that some individuals may not be able to get the vaccination due to their personal health status (e.g., someone undergoing chemotherapy treatment) making getting the vaccine health-contingent. And, the agencies settled that getting a COVID-19 vaccination is an activity related to a health factor.

Can Cost Sharing Be Imposed on Vaccines?

The agencies reiterated that effective January 5, 2021, plans and issuers must cover COVID-19 vaccines along with their administration without cost sharing immediately upon a vaccine becoming authorized under an Emergency Use Authorization (EUA) or approved under a Biologics License Application (BLA). The agencies clarified that this includes immediate required coverage for any authorized booster shots upon the date authorized and immediate required coverage for any expanded age group (e.g., children under age 12) on the date authorized. Due to apparent confusion about the effective date of required coverage for expanded vaccinations under any amended EUA or BLA, this requirement will be effective prospectively only.

Can Group Health Plan Eligibility or Benefits Be Conditioned on Vaccination Status?

This is a hard no, as it would be considered discriminating based on a health factor. To be clear, while a health plan cannot condition eligibility or benefits on vaccination status, the agencies have noted that plans may condition premiums or cost-sharing on vaccination status, within the parameters of HIPAA as described in our earlier alert.

How Does a Premium Differential Impact ACA Affordability?

The agencies also confirmed our prior view that premium incentives will be treated as not earned for purposes of measuring affordability under the ACA. This is true for all wellness incentives, other than for those related to tobacco use.

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