ARIZONA STATE SENATE
Forty-eighth Legislature, First Regular Session
FINAL AMENDED
FACT SHEET FOR H.B. 2139
health care facilities; licensure; exemption
(NOW: insurance; wellness programs)
Purpose
Allows individual and group health plans to offer rewards or incentives under a wellness program that meets certain requirements.
Background
Federal regulation related to the Health Insurance Portability and Accountability Act (HIPAA) describes wellness programs as “Any program designed to promote health or prevent disease.” Examples of wellness programs include weight-loss programs, smoking cessation classes, garden markets and health education seminars. Incentive-based wellness programs offer benefits, such as discounted insurance rates or cash to participating individuals or those who satisfy a standard outlined by the insurance company. Participants in such a standard or outcome-based program might receive a discounted insurance premium if they quit smoking after attending smoking cessation classes. In a participation-based program, individuals might receive the same reward for attending smoking cessation classes regardless of whether or not they quit smoking.
Federal law outlines five different requirements for standard or outcome-based wellness programs based on rewards or incentives: a) the reward must not exceed 20 percent of the total cost of coverage under the plan; b) the program must be reasonably designed to promote health or prevent disease; c) the plan must give individuals the opportunity to qualify for the reward at least once a year; d) the wellness program must allow a “reasonable alternative standard” for individuals for whom it would be medically difficult or inadvisable to satisfy the standard; and e) a plan must disclose the availability of an alternative standard in plan materials. These requirements apply only to group insurance plans.
Currently, statute prohibits health insurance contracts that discriminate in either the terms of the contract or the premium amount in favor of or against individuals who have substantially similar insuring, risk, exposure or expense elements (A.R.S. § 20-448). It also prohibits insurers from offering any goods or prizes of an aggregate value of more than ten dollars in connection with any insurance transaction not specified in the insurance contract (A.R.S. § 20-452). In addition, statute states that health benefits plans may not condition benefits based on health-status related factors (A.R.S. § 20-2310).
These sections of statute prohibit insurance companies from offering incentive-based wellness programs. Wellness programs that are not incentive or reward based are permitted under current law. In addition, self-insured employers may provide incentive-based programs to their employees, because they are not subject to state insurance regulations.
H.B. 2139 allows group health plans to offer rewards and incentives under a wellness program that meets federal requirements. Because the HIPAA regulations are applicable only to group plans, the bill requires individual plans to satisfy the equivalent of these requirements.
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Allows a group disability insurance plan to offer rewards or incentives under a wellness program that satisfies requirements for an exception from the general prohibition against discrimination based on a health factor under HIPAA.
2. Allows an individual disability insurance plan to offer rewards or incentives under a wellness program that satisfies the equivalent of requirements for an exception from the general prohibition against discrimination based on a health factor under HIPAA.
3. Makes conforming changes.
4. Becomes effective on the general effective date.
Amendments Adopted by Committee
· Adopted the strike everything amendment.
House Action Senate Action
HEALTH 1/24/07 DP 9-0-0-1 HEALTH 3/22/07 DPA/SE 6-0-1-0
3rd Read 2/12/07 54-4-2-0 CED 3/28/07 W/D
Final Read 4/18/07 58-0-2-0 3rd Read 4/10/07 28-0-2-0
Signed by the Governor 4/24/07
Chapter 113
Prepared by Senate Research
July 17, 2007
BKL/jas