28 TAC §§21.4701 - 21.4707
1. INTRODUCTION. The Texas Department of Insurance proposes new Subchapter MM, §§21.4701 - 21.4707, concerning standards for the establishment of, and requirements applicable to, wellness programs designed to promote disease prevention, wellness and health, and developed pursuant to applicable provisions of the Insurance Code Title 8, Chapters 1201 and 1501. The proposed new sections are necessary to implement House Bill (HB) 2252, 80th Legislature, Regular Session, which created the Insurance Code §1201.013 to provide that an insurer issuing an accident and health insurance policy may establish premium discounts, rebates, or a reduction in otherwise applicable copayments, coinsurance, or deductibles, or any combination of these incentives, in return for an insured's participation in programs promoting disease prevention, wellness and health; and which also amended the Insurance Code §1501.107, to provide that a small or large employer health benefit plan issuer may establish premium discounts, rebates, or a reduction in otherwise applicable copayments, coinsurance, or deductibles or any combination of such incentives, in return for participation in programs promoting disease prevention, wellness and health.
Proposed new §21.4701 states the applicability and scope of the new sections.
Proposed new §21.4702 provides definitions for certain terms.
Proposed new §21.4703 provides the statement of exception to federal and state statutory prohibitions against discriminating based on health status related factors in group health coverage products. The exception expressly permits incentives to be provided by issuers based on whether an individual has met the standards of a wellness program that satisfies the requirements of the subchapter.
Proposed new §21.4704 sets out the purpose of the subchapter.
Proposed new §21.4705 sets out baseline criteria that must be met in order for a program to be considered a wellness program that constitutes a permitted exception to the federal and state statutory prohibitions against discrimination based on a health status-related factor.
Proposed new §21.4706 sets out provisions for wellness programs that predicate eligibility for reward under the program solely on the basis of participation in the program.
Proposed new §21.4707 sets out provisions for wellness programs that base reward eligibility on satisfaction of a health status related standard.
2. FISCAL NOTE. Katrina Daniel, Associate Commissioner of the Life, Health, and Licensing Division, has determined that for each year of the first five years the proposed new sections will be in effect there will be no fiscal impact to local governments as a result of the enforcement or administration of the rule. There will be no measurable effect on local employment or the local economy as a result of the proposal.
3. PUBLIC BENEFIT/COST NOTE. Ms. Daniel also has determined that for each year of the first five years the proposed new sections are in effect, the public benefits anticipated as a result of the proposed new sections will be facilitation of wellness programs, potentially making health coverage more affordable and accessible than it might otherwise be, and encouraging covered individuals to participate in programs designed to promote disease prevention, wellness and health. The proposed new sections, and their focus on wellness programs to promote educating and empowering covered persons to take charge of their own health, manage chronic conditions and adopt healthier behaviors, will make available a means to help employees, group members, and other persons covered under group plans or individual policies to understand the state of their own health. The proposed new sections will permit development and implementation of initiatives by health plan issuers and group contract holders that are designed to improve or maintain personal health, as well as incentives to help assure strong levels of participation in programs with strategies targeting the adoption of personal health behavior modification(s) supporting healthier lifestyles. Any costs to persons required to comply with these proposed new sections for each year of the first five years the proposed new sections will be in effect are the result of the enactment of HB 2252 and not the result of the adoption, enforcement, or administration of the proposed new sections. There is no anticipated difference in cost of compliance between small and large businesses.
4. ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS FOR SMALL AND MICRO BUSINESSES. In accordance with the Government Code §2006.002(c), the Department has determined that the proposed new sections concerning standards for the establishment of, and requirements applicable to, wellness programs designed to promote disease prevention, wellness and health will not have an adverse economic effect on small businesses or micro businesses that are required to comply with the proposal. Because the proposal does not impose any new requirements or costs with which businesses, regardless of size, must comply, any costs to persons required to comply with these proposed new sections are the result of the enactment of HB 2252, and not the result of the adoption, enforcement, or administration of the proposed new sections. In accordance with the Government Code §2006.002(c), the Department has therefore determined that a regulatory flexibility analysis is not required because the proposal will not have an adverse impact on small or micro businesses.
5. TAKINGS IMPACT ASSESSMENT. The Department has determined that no private real property interests are affected by this proposal and that this proposal does not restrict or limit an owner's right to property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking or require a takings impact assessment under the Government Code §2007.043.
6. REQUEST FOR PUBLIC COMMENT. To be considered, written comments on the proposal must be submitted no later than 5:00 p.m. on November 3, 2008, to Gene C. Jarmon, General Counsel and Chief Clerk, Mail Code 113-2A, Texas Department of Insurance, P. O. Box 149104, Austin, Texas 78714-9104. An additional copy of the comment must be simultaneously submitted to Doug Danzeiser, Deputy Commissioner for Regulatory Matters, Life, Health and Licensing Division, Mail Code 107-2A, Texas Department of Insurance, P.O. Box 149104, Austin, Texas 78714-9104. Any request for a public hearing should be submitted separately to the Office of the Chief Clerk before the close of the public comment period. If a hearing is held, written and oral comments presented at the hearing will be considered.
7. STATUTORY AUTHORITY. The new sections are proposed under the Insurance Code §§1201.006, 1501.010, and 36.001. Section 1201.006 authorizes the Commissioner to adopt reasonable rules as necessary to implement the purposes and provisions of Chapter 1201, relating to the regulation of Accident and Health Insurance. Section 1501.010 authorizes the Commissioner of Insurance to adopt rules as necessary to implement Chapter 1501, relating to the Health Insurance Portability and Availability Act. Section 36.001 provides that the Commissioner of Insurance may adopt any rules necessary and appropriate to implement the powers and duties of the Texas Department of Insurance under the Insurance Code and other laws of this state.
8. CROSS REFERENCE TO STATUTE. The following statutes are affected by this proposal:
Rule Statutes
§§21.4701 - 21.4707 Insurance Code §1201.013 and §1501.107
9. TEXT.
§21.4701. Applicability and Scope. This subchapter applies to any small employer health benefit plan issuer, any large employer health benefit plan issuer, and any insurer issuing an accident and health insurance policy, with respect to a policy or plan that establishes premium discounts, rebates, or reductions in otherwise applicable copayments, coinsurance, or deductibles, or any combination of these incentives, in return for participation in programs designed to promote disease prevention, wellness and health.
§21.4702. Definitions. The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.
(1) Health status related factor--Health status; medical condition, including both physical and mental illnesses; claims experience; receipt of health care; medical history; genetic information; evidence of insurability, including conditions arising out of acts of domestic violence; and disability.
(2) Wellness Program--Any program designed to promote disease prevention, wellness and health.
§21.4703. Wellness Programs Exception.
(a) Notwithstanding the provisions of the Insurance Code Chapter 1501, §541.056(a) and §544.052, and the provisions of Chapter 26, Subchapter A of this title (relating to Small Employer Health Insurance Portability and Availability Act Regulations), a group health benefit plan issuer or an accident and health insurance issuer may vary the amount of premium or contribution it requires similarly situated individuals to pay, and/or vary benefits, including cost-sharing mechanisms such as a deductible, copayment, or coinsurance, based on whether an individual has met the standards of a wellness program that satisfies the requirements of §21.4706 or §21.4707 of this subchapter (relating to Wellness Programs With Participation as Sole Basis for Reward Eligibility and Wellness Programs With Reward Eligibility Based on Satisfying a Health Status Related Standard).
(b) Notwithstanding the provisions of the Insurance Code §541.056(a) and §544.052, an insurer issuing an accident and health insurance policy may vary the amount of premium or contribution it requires similarly situated individuals or individuals of the same class and of essentially the same hazard to pay, and/or vary benefits, including cost-sharing mechanisms such as a deductible, copayment, or coinsurance, based on whether an individual has met the standards of a wellness program that satisfies the requirements of §21.4706 or §21.4707 of this subchapter.
§21.4704. Purposes. The purposes of this subchapter are to provide for the circumstances under which, and the constraints within which, a group health benefit plan issuer or an accident and health insurance issuer may:
(1) vary benefits, including cost-sharing mechanisms such as a deductible, copayment, or coinsurance, based on whether an individual has met the standards of a wellness program that satisfies the requirements of §21.4706 or §21.4707 of this subchapter (relating to Wellness Programs With Participation as Sole Basis for Reward Eligibility and Wellness Programs With Reward Eligibility Based on Satisfying a Health Status Related Standard); and/or
(2) vary the amount of premium or contribution it requires similarly situated individuals to pay based on whether an individual has met the standards of a wellness program that satisfies the requirements of §21.4706 or §21.4707 of this subchapter.
§21.4705. General Provisions Applicable to Wellness Programs.
(a) Wellness programs as set out in this subchapter are excepted from the general prohibitions against discrimination based on a health status related factor for plan provisions that vary benefits, including cost-sharing mechanisms, or the premium or contribution for individuals eligible for plan coverage, in connection with participation in such a wellness program.
(b) A wellness program must be reasonably designed to promote disease prevention, wellness and health. A program satisfies this standard if it:
(1) has a reasonable probability of improving the health of, or preventing disease in, participating individuals;
(2) is not overly burdensome;
(3) is not a subterfuge for otherwise prohibited discrimination based on a health status related factor; and
(4) is not highly suspect in the method chosen to promote disease prevention, wellness and health.
(c) A wellness program must comply, as applicable, with the Insurance Code §1701.061 and provisions of rules codified in this title relating to the Insurance Code §1701.061 and the administration of noninsurance benefits.
§21.4706. Wellness Programs With Participation as Sole Basis for Reward Eligibility.
(a) A wellness program which contains no condition for obtaining a reward that is premised on an individual satisfying a standard that is associated with a health status related factor does not violate this subchapter so long as participation in the program is made available to all individuals eligible for coverage under the plan.
(b) Wellness programs meeting the description of this section would include the following program types:
(1) a program that reimburses all or part of the cost for membership in a fitness center;
(2) a diagnostic testing program that provides a reward for participation and does not base any part of the reward on testing outcomes;
(3) a program that encourages preventive care through the waiver of the copayment or deductible requirement under a group health plan or individual policy for the costs of a particular preventive care item or items;
(4) a program that reimburses covered individuals for the costs of smoking cessation programs without regard to whether the individual quits smoking; or
(5) a program that provides a reward to covered individuals for attending a monthly health education seminar.
§21.4707. Wellness Programs With Reward Eligibility Based on Satisfying a Health Status Related Standard. A wellness program which contains any condition for obtaining a reward that is premised on an individual satisfying a standard that is associated with a health status related factor does not violate this subchapter so long as the requirements of paragraphs (1) - (6) of this section are met.
(1) For a group health benefit plan, the reward for the wellness program, coupled with the reward for other wellness programs offered under the same plan and which also require satisfaction of a standard associated with a health status related factor, must not exceed in total value 20 percent of the cost of employee-only, or member-only, coverage under the plan. However, if, in addition to employees or members, any class of dependents--such as spouses or spouses and dependent children--may participate in the wellness program, the reward must not exceed 20 percent of the cost of the coverage in which an employee, or member, and any dependents are enrolled.
(A) For purposes of this section, the cost of coverage is determined based on the total amount of employer and employee contributions, or member contributions, for the benefit package under which the employee or member is, or the employee, or member, and any dependents are, receiving coverage.
(B) A reward can be in the form of a discount or rebate of a premium or contribution; a waiver of all or part of a cost-sharing mechanism such as deductibles, copayments, or coinsurance; the absence of a surcharge; or the value of a benefit that would otherwise not be provided under the plan.
(2) The program must meet the criteria set out in §21.4705 of this subchapter (relating to Wellness Programs General Provisions).
(3) The program must give individuals eligible for the program the opportunity to qualify for the reward under the program at least once per year.
(4) The reward under the program must be available to all similarly situated individuals.
(A) A reward under this subchapter is available to all similarly situated individuals for a period so long as the program allows, at a minimum:
(i) a reasonable alternative standard, or waiver of the otherwise applicable standard, for obtaining the reward for any individual for whom, for that period, it is unreasonably difficult due to a medical condition or other health status related factor to satisfy the otherwise applicable standard; and
(ii) a reasonable alternative standard, or waiver of the otherwise applicable standard, for obtaining the reward for any individual for whom, for that period, it is medically inadvisable to attempt to satisfy the otherwise applicable standard.
(B) A plan or issuer may seek verification, such as a statement from an individual's physician, that medical condition or other health status related factor makes it unreasonably difficult or medically inadvisable for the individual to satisfy or attempt to satisfy the otherwise applicable standard.
(5) The health benefit plan or policy, or health benefit plan or policy issuer, must disclose, in all plan materials describing the terms of the program, the availability of a reasonable alternative standard or the possibility of waiver of the otherwise applicable standard required under paragraph (4) of this section. However, if plan materials merely mention that a program is available, without describing its terms, this disclosure is not required.
(6) The following language, or substantially similar language, can be used to satisfy the requirement of paragraph (5) of this section: "If it is unreasonably difficult due to a medical condition for you to achieve the standards for the reward under this program, or if it is medically inadvisable for you to attempt to achieve the standards for the reward under this program, call us at (insert telephone number) and we will work with you to develop another way to qualify for the reward."