With the Affordable Care Act increasing the incentive for employees to quit smoking, many employers are wondering how e-cigarettes fit into their wellness program, or if they even do at all.
As part of the ACAs final regulations for employer wellness programs, the health law increases the maximum reward that can be offered to employees participating in a health-contingent wellness program from 20% of the cost of health insurance coverage to 30%, and up to 50% for those participating in a tobacco cessation program. Advisers should be up to speed on these regulations and prepared to answer specific and nuanced questions from clients about remaining in compliance with the rules.
But the final regulations, which also reiterate that health-contingent wellness programs require an individual satisfy a standard related to a health factor to obtain the reward, make no mention of e-cigarettes. Yet, employer inquiries relating to e-cigarettes are starting to surface in the context of wellness program administration, according to Alden Bianchi, practice group leader of MintzLevins employee benefits and executive compensation practice.
Specifically, he says in a recent blog post, employers are asking the following questions that benefit brokers and advisers should be aware of:
- Is an individual who uses e-cigarettes a smoker for purposes of qualifying, or not qualifying, for a wellness program reward, and;
- Can a wellness program offer e-cigarettes as an alternative standard, i.e., one that if satisfied would qualify an individual as a non-smoker?
An electronic cigarette is a battery-powered vaporizer that simulates tobacco smoking by producing an aerosol resembling smoke. The vaporized liquid usually contains nicotine, the active ingredient in cigarettes.
Bianchi says that while the final rules, published last summer, dont mention or otherwise refer to e-cigarettes, they do provide ample clues to support the proposition that smoking cessation involves tobacco use.
On the other hand, within the final regulations, the definition of what constitutes a participatory wellness program refers simply to smoking cessation and the definition of an outcome-based wellness program simply refers to not smoking, he says, adding that in neither case is there any reference to tobacco.
However, he says, by virtue of being included in ERISA, participants have a private right of action to enforce the ACAs final rules. Therefore, an employer that wanted to treat the use of e-cigarettes as smoking in order to deny access to a wellness reward would likely confront arguments from participants emphasizing the use of the word tobacco in the final regulations.
Bianchi says the question of whether a wellness program can offer e-cigarettes as an alternative standard that could qualify an individual as a non-smoker, is a more difficult question.
Anecdotal evidence suggests that employers are not doing so, at least not yet, he says, adding that too many questions remain, including whether it would make a difference if the e-cigarette in question used a nicotine-based solution as opposed to some other chemical.
The benefits and risks of electronic cigarette use are uncertain, with evidence going both ways. Better evidence would certainly give the regulators the basis for further rulemaking in the area, Bianchi says.
In the meantime, the final regulations multiple references to tobacco, and by implication, nicotine, seem to furnish as good a starting point as any, he says. This approach would require a wellness plan sponsor to distinguish between nicotine-based and non-nicotine-based solutions, which may prove administratively burdensome.
The larger question, Bianchi says, is whether e-cigarettes advance or retard the cause of wellness. Absent reliable clinical evidence, regulators and wellness plan sponsors have little to guide their efforts or inform their decisions as to how to integrate e-cigarettes into responsible wellness plan designs.
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