How can I assist employees with medical conditions?

An employer may allow additional benefits or relaxed eligibility requirements for individuals with one or more health conditions (e.g. diabetes, cancer, etc), at the employer’s discretion.  An employer may not reduce benefits or in any way discriminate against employees with adverse health conditions.

Where an employer wishes to give additional benefits to employees in a given class who have a chronic or serious health condition that may increase their healthcare costs (e.g. diabetes, organ transplant), the employer simply creates an additional class for those participants within the class who have a health condition(s). HRA regulations allow employers to create classes of similarly-situated employees within an HRA plan, and vary the financial contributions and benefits provided to participants in each class.

Example: An employer has an HRA with three classes of employees, Drivers, Managers, and Executives, that each receive $100/month, $200/month, and $325/month HRA allowances respectively. The employer wishes to give 50% higher level of HRA allowances to Drivers and Managers who have a health condition or who have a family member with a health condition.  In this example, the employer would set up two additional classes of employees, called Drivers+ and Managers+ (the “+” denotes a different class for participants with health conditions), and the monthly HRA allowances for participants in the Drivers+ and Managers+ classes would be set as $150/month and $300/month respectively.

Employees with health conditions are legally allowed to receive increased HRA benefits, but discrimination against employees with health conditions is prohibited. Multiple methods exist to administer higher levels of HRA benefits for HRA participants with health conditions, and no opinion is expressed or implied herein that any particular method is better than any other. Employers are advised to consult with their own benefits counsel.

Example Implementation

1. Choose a Class (e.g. Drivers) for which you wish to give a higher level of HRA benefits to participants with health conditions, create a new Class (e.g. “Drivers+”) on your ZaneHRA employer account, and define the level of allowances and plan design for the new Class.
2. Define in writing the eligibility requirements (typically a list of health conditions) for membership in each “+” class (e.g. Drivers+). These should be the same requirements for the basic “Driver” class plus submitted proof that the participant has at least one of the listed health conditions.  To ensure non-discrimination against participants with a health condition, individuals who qualify for the richer “+” class should be given the option to participate in either the regular (non-“+”) class or the “+” class.
3. At least once each Plan Year and upon a new enrollment, notify employees in the specific class (e.g. Drivers) that they may qualify for a higher level of HRA Benefits if they choose to submit proof that they have one or more of the health conditions on the defined list.
4. At the beginning of each Plan Year and upon new enrollment, participants should submit proof of their specific health condition to the HIPAA-designee of their employer (typically the benefits administrator). Participants should also sign a statement that they will notify their employer if they cease to have the health condition.  It is the HIPAA-designee’s responsibility to enroll participants in the appropriate class and keep submitted health information confidential.

Zane Benefits advises that employers not copy an exact list of qualifying medical conditions from their state risk pool or use language that implies a person is getting higher financial benefits because of their acceptance into any government-subsidized health programs such as Medicaid or a state risk pool.