Your group health plan charges participants a tobacco premium surcharge but also provides an opportunity to avoid the surcharge if, at the time of enrollment or annual re-enrollment, the participant agrees to participate in (and subsequently completes within the plan year) a tobacco cessation educational program. One of the participants, a tobacco user, initially declined the opportunity to participate in the tobacco cessation program, but would like to join in the middle of the plan year. Is the plan required to provide the opportunity to avoid the surcharge or provide another reward to the individual for that plan year?
No, if a participant is provided a reasonable opportunity to enroll in the tobacco cessation program at the beginning of the plan year and qualify for the reward (i.e., avoiding the tobacco premium surcharge) under the program, the plan is not required (but is permitted) to provide another opportunity to avoid the tobacco premium surcharge until renewal or reenrollment for coverage for the next plan year. Nothing, however, prevents a plan or issuer from allowing rewards (including prorated rewards) for mid-year enrollment in a wellness program for that plan year.
Standard for obtaining a reward. If a qualified plan participant’s doctor advises that an outcome-based wellness program’s standard for obtaining a reward is medically inappropriate for the participant, the plan must provide a reward for satisfying a reasonable alternative standard that accommodates the recommendations of the doctor. Sample language, found in ERISA Reg. §2590.702(f)(6), may be used to satisfy the requirement to provide notice of the availability of a reasonable alternative standard. This language may be modified if it includes all required content found in paragraphs (f)(3)(v) or (f)(4)(v) of the regulations.
Source: FAQs about Affordable Care Act Implementation (Part XVIII) and Mental Health Parity Implementation, January 9, 2014, http://www.dol.gov/ebsa/faqs/faq-aca18.html.