May 24, 2019
Opinion on BeniComp IncentiCare Plan through Pan American Life
Erica N. Cordova - VP, Legal Counsel
Does the BeniComp IncentiCare plan constitute a wellness program that must comply with the wellness program rules under HIPAA, the ACA, the ADA, and GINA?
According to BeniComp, “IncentiCare is not a traditional wellness program; it is a supplemental policy that leverages preventive health…Wellness plans are subject to the regulations of the base medical plan where all of the wellness restrictions, laws, regulations, and compliance woes live. IncentiCare is not.” Despite BeniComp’s assertion that IncentiCare is not subject to the various wellness rules, a review of BeniComp’s IncentiCare description of its “Outcome-Based Deductible Incentives” and “Preventive Health Management (PHM)” suggests that this plan operates, at least in part, as an outcome-based wellness program that would be subject to the wellness program rules under HIPAA, the ACA, the ADA, and GINA.
The IncentiCare model is based primary on deductible reduction incentives for preventive care and preventative health management activities. Traditionally, under the HIPAA nondiscrimination rules, wellness programs that utilize participation-only diagnostic testing or waive/reduce a co-pay or deductible for preventive care are deemed programs that are not based on a health factor. When the wellness program is not based on a health factor, it is not subject to the more robust wellness program compliance rules regarding incentive limits and the offer of a reasonable alternative standard.
However, because part of BeniComp’s IncentiCare involves outcome-based incentives that require the participant to achieve a defined goal to obtain the reward versus simply receiving the preventive care, parts of the BeniComp IncentiCare model are based on a health factor. Outcome-based wellness programs that
are based on a health factor must: 1) not exceed the reward limits; 2) be designed to promote health and prevent disease; 3) offer an opportunity to earn the reward at least once per year; 4) offer a reasonable alternative standard for individuals unable to achieve the original standard; and 5) disclose the availability of the reasonable alternative standard. BeniComp IncentiCare’s deductible reduction incentives are particularly problematic for complying with the reward limit currently set at approximately 30% of the cost of coverage. Accordingly, we do not recommend that you sell this product to your clients.
Does the BeniComp plan constitute an excepted benefit under the ACA that is not subject to the ACA
coverage reform and plan mandates?
According to BeniComp, “BeniComp IncentiCare meets the statutory requirements as a supplemental, excepted benefit and as such is exempt from the provisions of Part 7 of ERISA, Chapter 100 of the Code, and Title XXVII of the PHS Act, including the relevant provisions added by the ACA.” To be an excepted benefit under the ACA (and not have to comply with ACA market reforms), the plan must fit into one of the four categories: non-health or limited wraparound benefit, limited scope benefit, non-coordinated benefit, or supplemental benefit. BeniComp IncentiCare purports to be a “supplemental benefit” which is
supplemental coverage provided under insurance that is a Medicare or Tricare supplement or similar coverage designed to fill the gap.
Under the regulations, “if group or individual supplemental health insurance covers items and services not included in the primary, the coverage will be considered to be designed ‘to fill gaps in primary coverage,’ for purposes of being supplemental excepted benefits if none of the benefits provided by the supplemental policy are an [essential health benefit] (EHB) in the State in which the coverage is issued. Thus, if any benefit provided by the supplemental policy is either included in the primary coverage or is an EHB in the State where the coverage is issued, the insurance coverage would not be supplemental excepted benefits under the proposed regulations.”
The BeniComp IncentiCare plan has difficulty fitting into the supplemental excepted benefit category because it provides essential health benefits as provided by the applicable state. A review of BeniComp IncentiCare’s “Preventive Health Management (PHM)” program shows an overlap with some state Essential Health Benefits, particularly in relation to health screenings.
Therefore, in addition to not being compliant with wellness compliance rules under HIPAA, the ACA, the ADA, and GINA, it also is not ACA compliant in any state in which its covered services overlap with the state’s EHB.
If you have additional questions or concerns, please contact OneDigital Compliance at askcompliance@onedigital.com.