The Department of Labor (DOL), Department of Health and Human Services (HHS), and the Internal Revenue Service (IRS), collectively known as “The Agencies” issued an FAQ on June 21, 2016 and the Equal Employment Opportunity Commission (EEOC) provided a new sample notice, required by the Americans with Disabilities Act (ADA), for wellness programs effective as of the first plan year beginning on or after January 1, 2017.
Generally, employers with 20 or more employees must offer COBRA for their group health plans. This entails providing written COBRA notices at the beginning of health insurance coverage explaining a participant’s COBRA rights and COBRA election notices upon eligibility for COBRA coverage.
In 2004 and again in 2013 the DOL issued requirements and model COBRA notices to assist employers with COBRA compliance. The 2013 model notices included basic information about the Affordable Care Act (ACA) and coverage available in the Marketplace. An updated model notice issued May 2, 2014 reflects that coverage is now available in the Marketplace and provides information on special enrollment rights in the Marketplace.
This latest FAQ expands on additional information that may be included in the COBRA notice beyond what is included in the DOL's model notice. This can incorporate other information about the Marketplaces, such as:
COBRA election notices may be also tailored to particular groups such as young adults who age out of dependent coverage under their parents’ coverages. The Agency guidance notes the language should be “easily understood by the average plan participant” and not too lengthy.
Using the DOL’s model COBRA notice is not mandatory; however, employers may choose to add suggested information to help qualified beneficiaries understand their rights and available options. There is no regulatory requirement or deadline for inserting this information into an employer’s COBRA notice. WageWorks COBRA notices are up to date and there is no action needed by our COBRA clients for this requirement.
In separate guidance, new rules from the final ADA Wellness Regulations require employers who offer wellness programs that collect employee health information to provide a notice to employees that includes:
In issuing this final rule, the ADA sought to provide consistency with the Health Insurance Portability and Accountability Act (HIPAA) and the ACA rules on wellness program incentives. Also, the ADA wanted to ensure that participation in wellness programs was voluntary.
Unlike HIPAA and the ACA, the ADA places limits on disability-related inquiries and medical examinations related to wellness programs, regardless of how the information obtained is ultimately used.
The sample notice includes all ADA required information, including a sentence describing the wellness program as voluntary, the right not to participate, and a caveat regarding incentives. Also incorporated is a statement of privacy and security of personally identifiable health information. Although employers do not have to use the precise wording in the sample notice, they must convey the same meaning in their customized notices.
Notices are to be distributed prior to employees providing health information and with plenty of time for participants to decide whether or not to participate in the wellness program. Notices may be provided via email or hard copy and those with disabilities may require the notice in an alternate format.
Although employees’ signed authorizations are not required (spouses’ written authorizations may be), best practice would be to obtain signed authorizations from employees to comply with other requirements such as HIPAA and the Genetic Information Nondiscrimination Act (GINA).
We are fast approaching the New Year. Now is the time to review all notice requirements and include the latest terminology to keep your notices compliant.
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