What are HIPAA's nondiscrimination provisions?

HIPAA’s nondiscrimination provisions prohibit group health plans and group health insurance issuers from discriminating against individuals when it comes to “health factors”. A U.S. Department of Labor paper titled, FAQs on HIPAA Portability and Nondiscrimination Requirements for Workers puts it simply noting, “Under HIPAA, you and your family members cannot be denied eligibility or benefits based on certain "health factors" when enrolling in a health plan. In addition, you may not be charged more than similarly situated individuals based on any health factors.” 

The eight defined health factors include health status, medical conditions, claims experience, receipt of healthcare, medical history, genetic information, evidence of insurability, and disability. The provisions specifically provide protections when it comes to unfair treatment impacting eligibility, premiums, or coverage. 

The main objectives of the nondiscrimination provision

1. HIPAA's nondiscrimination provisions aim to make sure that all individuals receive equal treatment in healthcare, regardless of their health status or other protected characteristics.
2. They guarantee that no one can be denied eligibility for group health plan enrollment or continuation due to health factors.
3. HIPAA ensures that individuals are not charged more for coverage based on health factors.
4. The provisions allow employers to differentiate benefits among distinct groups of employees, provided these groups are not similarly situated.
5. They promote fairness and equality in healthcare by requiring equal access to services and reasonable modifications for individuals with disabilities.
6. HIPAA also requires compliance with other nondiscrimination requirements, like those under Section 105(h) for self-insured plans.
7. The provisions provide special enrollment rights for individuals experiencing certain life events, like the birth of a child or loss of other coverage.

What are “similarly situated individuals” under the provision?

The concept of "similarly situated individuals" refers to a group of individuals who are alike in all relevant ways for purposes of a particular decision or issue, such as eligibility for health benefits or premium rates. Under HIPAA, employers can differentiate health benefits among distinct groups of employees, provided these groups are not similarly situated. It means that any distinctions must be based on bona fide employment-based classifications consistent with the employer's usual business practices.

Examples of bona fide employment-based classifications include full-time versus part-time status, geographic location, membership in a collective bargaining unit, date of hire, length of service, current versus former employee status, and different occupations. These classifications allow employers to treat different groups of employees differently, as long as the distinctions are not based on health factors.

The exceptions under the nondiscrimination rules

1. Employers can differentiate health benefits among distinct groups of employees if the groups are not similarly situated, provided the distinctions are based on bona fide employment related classifications.
2. Plans can exclude or limit benefits for certain conditions or treatments, but such exclusions must not violate other laws like the Americans with Disabilities Act (ADA).
3. Wellness programs are allowed under the nondiscrimination rules if they are available to all similarly situated individuals.
4. Health Reimbursement Arrangements (HRAs) that permit participants to carry forward unused balances into later years do not violate HIPAA nondiscrimination rules, as long as the total benefit over time is the same for similarly situated individuals.
5. Plans may establish more favorable rules for eligibility or premium rates for individuals with adverse health factors, such as disabilities. 

Related: HIPAA Compliant Email: The Definitive Guide

FAQs

Does HIPAA apply to employers in general?

HIPAA applies to employers when they create, maintain, or transmit PHI in connection with a HIPAA-covered transaction, such as administering a self-insured health plan.

Are employers with self-insured health plans subject to HIPAA?

Employers are not directly subject to HIPAA for self-insured plans, but they must ensure PHI is safeguarded and not used for employment-related actions.

Can employers discriminate in health plan eligibility, benefits, or premiums based on health factors?

No, HIPAA prohibits discrimination in group health plan eligibility.