On Oct. 4, 2021, the Departments of Labor, Health and Human Services and the Treasury Departments issued FAQs addressing rules regarding premium incentives for COVID-19 vaccinations and rapid coverage of preventive services for COVID-19. As explained in a recent Pitcher Insurance Agency Inc. blog (www.pitcherinsurance.com/blog), “the FAQs clarify that a group health plan (or health insurance issuer offering coverage in connection with a group health plan) may offer participants a premium discount for receiving a COVID-19 vaccination. However, plans generally may not condition eligibility for benefits or coverage on vaccination status, and any discount must comply with the final wellness program rules.
“Under these rules,” the blog continues, “a premium discount that requires an individual to obtain a COVID-19 vaccination would be considered an activity-only wellness program, which is a type of health-contingent wellness program. These programs must comply with the regulations’ five nondiscrimination criteria, including an incentive limit and a requirement to offer a reasonable alternative standard in some cases. The maximum permissible reward (or penalty) under a health-contingent wellness program that is part of a group health plan (and is not related to tobacco use) is 30% of the cost of coverage.”