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Employee Benefits Compliance Q&A: HIPAA Nondiscrimination Rules

Oct 12, 2020 Decorative image

Note: Several COBRA time periods were extended due to the COVID-19 pandemic. Learn more here.

Each month in this series, we answer frequently asked compliance questions. Are you wondering whether your organization is compliant? Contact your Hylant representative or local Hylant office for a compliance checkup.

Q: How do HIPAA’s nondiscrimination rules affect an employer?

A: The Health Insurance Portability and Accountability Act (HIPAA) prohibits discrimination by group health plans and insurers based on factors related to health status. HIPAA nondiscrimination rules affect employers in various ways:

• HIPAA does not allow a group health plan to deny an individual eligibility for benefits or to charge a higher premium than is required of a similarly situated individual based upon health factors such as health status or medical history, medical condition (physical or mental), receipt of healthcare, claims experience, genetic information, evidence of insurability or disability.

• HIPAA prohibits group health plans from requiring employees to pass physical exams in order to be eligible for health insurance coverage.

• HIPAA prohibits group health plans from delaying an individual’s effective date for coverage because he or she is confined to a hospital or because he or she is not actively at work.

• HIPAA states that group health plans may include benefit limitations as long as the limitations apply uniformly to all similarly situated individuals.

• HIPAA states that group health plans may not charge employees higher premiums or deny them health insurance coverage based upon employees’ participation in dangerous or hazardous activities.

• HIPAA permits group health plans to treat individuals with adverse health factors more favorably.

For more compliance news and information, read our recent blog posts:

Compliance Q&A: Who is governed by the HIPAA privacy Rule?
Compliance Q&A: What does HIPAA do?
Electronic Distribution Rules for Health Plans

The above information does not constitute advice. Always contact your employee benefits broker or trusted adviser for insurance-related questions.