The Departments of Labor, Health and Human Services, and Treasury jointly issued a set of FAQs addressing whether health plans could provide an incentive to participants who receive the COVID-19 vaccine. The FAQs clarified that a health plan can provide an incentive through reduced premiums or modification of cost-sharing levels, but this would be considered a wellness program and must comply with the five criteria for activity-only wellness programs.
First, the program must give participants an opportunity to qualify for the incentive at least once a year. Second, the value of the incentive must not exceed 30% of the total cost of coverage.
Third, the program must be available to all similarly situated individuals and allow a reasonable alternative for anyone for whom it is unreasonably difficult due to a medical condition or medically inadvisable to obtain the COVID-19 vaccination. While a health plan would have flexibility to determine a reasonable alternative, the guidance provides the example of requiring participants to attest that they comply with the CDC’s mask guidelines for unvaccinated individuals as an alternative. Fourth, the plan must disclose this reasonable alternative in all plan materials describing the terms of the wellness program.
Fifth, the program must be reasonably designed to promote health or prevent disease. To comply with the requirement, the FAQs suggest that the program should not be overly burdensome. For example, while not strictly required, a plan-maintained toll-free hotline to answer questions about the vaccination and to offer assistance for vaccine appointment scheduling demonstrated that the program is reasonably designed to promote health or prevent disease. Additionally, the guidance noted that the alternative of attestation discussed previously is not overly burdensome.
The guidance also clarifies that a health plan may not condition eligibility for benefits or coverage on vaccination status. In other words, a health plan may not deny benefits—for example, coverage of claims related to treatment of a COVID-19 infection—because a participant is not vaccinated.