# 50 Ill. Adm. Code 20010.2001.9: Section 2001.9 Prohibiting Discrimination Against Participants and Beneficiaries Based on Health Status

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## Section

- **Citation:** 50 Ill. Adm. Code 20010.2001.9
- **Heading:** Section 2001.9 Prohibiting Discrimination Against Participants and Beneficiaries Based on Health Status
- **Jurisdiction:** Illinois
- **Kind:** Regulations
- **Status:** In force
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** Illinois Administrative Code / Title 50  /  / Part 20010  / Section 2001.9 Prohibiting Discrimination Against Participants and Beneficiaries Based on Health Status

## Text

TITLE 50: INSURANCE
CHAPTER I: DEPARTMENT OF INSURANCE
SUBCHAPTER z: ACCIDENT AND HEALTH INSURANCE
PART 2001 CONSTRUCTION AND FILING OF ACCIDENT AND HEALTH INSURANCE POLICY FORMS
SECTION 2001.9 PROHIBITING DISCRIMINATION AGAINST PARTICIPANTS AND BENEFICIARIES BASED ON HEALTH STATUS
Section 2001.9  Prohibiting Discrimination
Against Participants and Beneficiaries Based on Health Status
a)         Health Factors
1)         The
term health factor means, in relation to an individual, any of the following
health status-related factors:
A)        Health
status;
B)        Medical
condition (including both physical and mental illnesses), as defined in 45 CFR
144.103;
C)        Claims
experience;
D)        Receipt
of health care;
E)        Medical
history;
F)         Genetic
information, as defined in 45 CFR 146.122(a);
G)        Evidence
of insurability; or
H)        Disability.
2)         Evidence
of insurability includes:
A)        Conditions
arising out of acts of domestic violence; and
B)        Participation
in activities such as motorcycling, snowmobiling, all-terrain vehicle riding,
horseback riding, skiing, and other similar activities.
3)         The
decision whether health coverage is elected for an individual (including the
time chosen to enroll, such as under special enrollment or late enrollment) is
not, itself, within the scope of any health factor. (However, under 45 CFR 146.117,
a plan or issuer must treat special enrollees the same as similarly situated
individuals who are enrolled when first eligible.) (45 CFR 146.121)
b)         Prohibited Discrimination
in Rules for Eligibility
1)         In General
A)        A
group health plan, and a health insurance issuer offering health insurance
coverage in connection with a group health plan, may not establish any rule for
eligibility (including continued eligibility) of any individual to enroll for
benefits under the terms of the plan or group health insurance coverage that
discriminates based on any health factor that relates to that
In General
A)        A
group health plan, and a health insurance issuer offering health insurance
coverage in connection with a group health plan, may not establish any rule for
eligibility (including continued eligibility) of any individual to enroll for
benefits under the terms of the plan or group health insurance coverage that
discriminates based on any health factor that relates to that individual or a
dependent of that individual. This rule is subject to the provisions of subsection
(b)(2) (explaining how this Section applies to benefits), subsection (b)(3)
(allowing plans to impose certain preexisting condition exclusions), subsection
(d) (containing rules for establishing groups of similarly situated
individuals), subsection (e) (relating to nonconfinement, actively-at-work, and
other service requirements), subsection (f) (relating to wellness programs),
and subsection (g) (permitting favorable treatment of individuals with adverse
health factors).
B)        For
purposes of this Section, rules for eligibility include, but are not limited
to, rules relating to:
i)          Enrollment;
ii)         The
effective date of coverage;
iii)        Waiting
(or affiliation) periods;
iv)        Late
and special enrollment;
v)         Eligibility
for benefit packages (including rules for individuals to change their selection
among benefit packages);
vi)        Benefits
(including rules relating to covered benefits, benefit restrictions, and
cost-sharing mechanisms such as coinsurance, copayments, and deductibles), as
described in subsections (b)(2) and (b)(3);
vii)       Continued
eligibility; and
viii)      Terminating
coverage (including disenrollment) of any individual under the plan. (45 CFR
146.121)
C)        This subsection
ges);
vi)        Benefits
(including rules relating to covered benefits, benefit restrictions, and
cost-sharing mechanisms such as coinsurance, copayments, and deductibles), as
described in subsections (b)(2) and (b)(3);
vii)       Continued
eligibility; and
viii)      Terminating
coverage (including disenrollment) of any individual under the plan. (45 CFR
146.121)
C)        This subsection
(b)(1) is illustrated by the examples appearing in 45 CFR 146.121(b)(1)(iii).
2)         Application
to Benefits
A)        General
Rule
i)          Under
this Section, a group health plan or group health insurance issuer is not
required to provide coverage for any particular benefit to any group of
similarly situated individuals.
ii)         However,
benefits provided under a plan or through group health insurance coverage must
be uniformly available to all similarly situated individuals (as described in subsection
(d)). Likewise, any restriction on a benefit or benefits must apply uniformly to
all similarly situated individuals and must not be directed at individual
participants or beneficiaries based on any health factor of the participants or
beneficiaries (determined based on all the relevant facts and circumstances).
Thus, for example, a plan or issuer may limit or exclude benefits in relation
to a specific disease or condition, limit or exclude benefits for certain types
of treatments or drugs, or limit or exclude benefits based on a determination
of whether the benefits are experimental or not medically necessary, but only
if the benefit limitation or exclusion applies uniformly to all similarly
situated individuals and is not directed at individual participants or
beneficiaries based on any health factor of the participants or beneficiaries
or certain types
of treatments or drugs, or limit or exclude benefits based on a determination
of whether the benefits are experimental or not medically necessary, but only
if the benefit limitation or exclusion applies uniformly to all similarly
situated individuals and is not directed at individual participants or
beneficiaries based on any health factor of the participants or beneficiaries.
In addition, a plan or issuer may impose annual, lifetime or other limits on
benefits and may require the satisfaction of a deductible, copayment,
coinsurance or other cost-sharing requirement in order to obtain a benefit if
the limit or cost-sharing requirement applies uniformly to all similarly
situated individuals and is not directed at individual participants or
beneficiaries based on any health factor of the participants or beneficiaries.
In the case of a cost-sharing requirement, see also subsection (b)(2)(B), which
permits variances in the application of a cost-sharing mechanism made available
under a wellness program. (Whether any plan provision or practice with respect
to benefits complies with this subsection (b)(2)(A) does not affect whether the
provision or practice is permitted under any other provision of ERISA, the
Americans With Disabilities Act (42 USC 12101 et seq.), or any other law,
whether State or federal.)
iii)        For
purposes of this subsection (b)(2)(A), a plan amendment applicable to all
individuals in one or more groups of similarly situated individuals under the
plan and made effective no earlier than the first day of the first plan year
after the amendment is adopted is not considered to be directed at any
individual participants or beneficiaries.
iv)        This subsection
federal.)
iii)        For
purposes of this subsection (b)(2)(A), a plan amendment applicable to all
individuals in one or more groups of similarly situated individuals under the
plan and made effective no earlier than the first day of the first plan year
after the amendment is adopted is not considered to be directed at any
individual participants or beneficiaries.
iv)        This subsection
(b)(2)(A) is illustrated by the examples appearing in 45 CFR
146.121(b)(2)(i)(D).
B)        Exception
for Wellness Programs
A group health plan or group
health insurance issuer may vary benefits, including cost-sharing mechanisms
(such as a deductible, copayment or coinsurance), based on whether an
individual has met the standards of a wellness program that satisfies the
requirements of subsection (f).
C)        Specific
Rule Relating to Source-of-Injury Exclusions
i)          If a
group health plan or group health insurance coverage generally provides
benefits for a type of injury, the plan or issuer may not deny benefits
otherwise provided for treatment of the injury if the injury results from an
act of domestic violence or a medical condition (including both physical and
mental health conditions). This subsection (b)(2)(C)(i) applies in the case of
an injury resulting from a medical condition even if the condition is not
diagnosed before the injury.
ii)         This
subsection (b)(2)(C) is illustrated by the examples appearing in 45 CFR
146.121(b)(2)(iii)(B).
3)         Relationship
to 45 CFR 146.111
A)        A
preexisting condition exclusion is permitted under this Section if it :
i)          Complies
with 45 CFR 146.111;
ii)         Applies
uniformly to all similarly situated individuals (as described in subsection
(d)); and
iii)        Is
not directed at individual participants or beneficiaries based on any health
factor of the participants or beneficiaries. For purposes of this subsection
A
preexisting condition exclusion is permitted under this Section if it :
i)          Complies
with 45 CFR 146.111;
ii)         Applies
uniformly to all similarly situated individuals (as described in subsection
(d)); and
iii)        Is
not directed at individual participants or beneficiaries based on any health
factor of the participants or beneficiaries. For purposes of this subsection
(b)(3)(A)(iii), a plan amendment relating to a preexisting condition exclusion
applicable to all individuals in one or more groups of similarly situated
individuals under the plan and made effective no earlier than the first day of
the first plan year after the amendment is adopted is not considered to be
directed at any individual participants or beneficiaries. (45 CFR 146.121)
B)        This subsection
(b)(3) is illustrated by the examples appearing in 45 CFR 146.121(b)(3)(ii).
c)         Prohibited Discrimination
in Premiums or Contributions
1)         In General
A)        A
group health plan, and a health insurance issuer offering health insurance
coverage in connection with a group health plan, may not require an individual,
as a condition of enrollment or continued enrollment under the plan or group
health insurance coverage, to pay a premium or contribution that is greater
than the premium or contribution for a similarly situated individual (described
in subsection (d)) enrolled in the plan or group health insurance coverage based
on any health factor that relates to the individual or a dependent of the
individual.
B)        Discounts,
rebates, payments in kind, and any other premium differential mechanisms are
taken into account in determining an individual's premium or contribution rate
tion for a similarly situated individual (described
in subsection (d)) enrolled in the plan or group health insurance coverage based
on any health factor that relates to the individual or a dependent of the
individual.
B)        Discounts,
rebates, payments in kind, and any other premium differential mechanisms are
taken into account in determining an individual's premium or contribution rate.
(For rules relating to cost-sharing mechanisms, see subsection (b)(2)
(addressing benefits).)
2)         Rules Relating
to Premium Rates
A)        Group Rating
Based on Health Factors Not Restricted Under This Section
Nothing in this Section restricts
the aggregate amount that an employer may be charged for coverage under a group
health plan. But see 45 CFR 146.122(b), which prohibits adjustments in group
premium or contribution rates based on genetic information.
B)        List Billing
Based on a Health Factor Prohibited
However, a group health insurance
issuer, or a group health plan, may not quote or charge an employer (or an
individual) a different premium for an individual in a group of similarly
situated individuals based on a health factor. (But see subsection (l)
permitting favorable treatment of individuals with adverse health factors.)
C)        This subsection
(c)(2) is illustrated by the examples appearing in 45 CFR 146.121(c)(2)(iii).
3)         Exception
for Wellness Programs
Notwithstanding subsections (c)(1)
and (c)(2), a plan or issuer may vary the amount of premium or contribution it
requires similarly situated individuals to pay based on whether an individual
has met the standards of a wellness program that satisfies the requirements of subsections
s illustrated by the examples appearing in 45 CFR 146.121(c)(2)(iii).
3)         Exception
for Wellness Programs
Notwithstanding subsections (c)(1)
and (c)(2), a plan or issuer may vary the amount of premium or contribution it
requires similarly situated individuals to pay based on whether an individual
has met the standards of a wellness program that satisfies the requirements of subsections
(f) through (k). (45 CFR 146.121)
d)         Similarly Situated Individuals
The requirements of this Section
apply only within a group of individuals who are treated as similarly situated
individuals. A plan or issuer may treat participants as a group of similarly
situated individuals separate from beneficiaries. In addition, participants may
be treated as two or more distinct groups of similarly situated individuals and
beneficiaries may be treated as two or more distinct groups of similarly
situated individuals in accordance with this subsection (d). Moreover, if
individuals have a choice of two or more benefit packages, individuals choosing
one benefit package may be treated as one or more groups of similarly situated
individuals distinct from individuals choosing another benefit package.
1)         Participants
Subject to subsection (d)(3), a
plan or issuer may treat participants as two or more distinct groups of
similarly situated individuals if the distinction between or among the groups
of participants is based on a bona fide employment-based classification
consistent with the employer's usual business practice. Whether an
employment-based classification is bona fide is determined on the basis of all
the relevant facts and circumstances. Relevant facts and circumstances include
whether the employer uses the classification for purposes independent of
qualification for health coverage (for example, determining eligibility for
other employee benefits or determining other terms of employment)
s practice. Whether an
employment-based classification is bona fide is determined on the basis of all
the relevant facts and circumstances. Relevant facts and circumstances include
whether the employer uses the classification for purposes independent of
qualification for health coverage (for example, determining eligibility for
other employee benefits or determining other terms of employment). Subject to
subsection (d)(3), examples of classifications that, based on all the relevant
facts and circumstances, may be bona fide include full-time versus part-time
status, different geographic location, membership in a collective bargaining
unit, date of hire, length of service, current employee versus former employee
status, and different occupations. However, a classification based on any
health factor is not a bona fide employment-based classification unless the
requirements of subsection (l) are satisfied (permitting favorable treatment of
individuals with adverse health factors).
2)         Beneficiaries
A)        Subject
to subsection (d)(3), a plan or issuer may treat beneficiaries as two or more
distinct groups of similarly situated individuals if the distinction between or
among the groups of beneficiaries is based on any of the following factors:
i)          A
bona fide employment-based classification of the participant through whom the
beneficiary is receiving coverage;
ii)         Relationship
to the participant (for example, as a spouse or as a dependent child);
iii)        Marital
status;
iv)        With
respect to children of a participant, age or student status; or
v)         Any
other factor if the factor is not a health factor.
B)        Subsection
employment-based classification of the participant through whom the
beneficiary is receiving coverage;
ii)         Relationship
to the participant (for example, as a spouse or as a dependent child);
iii)        Marital
status;
iv)        With
respect to children of a participant, age or student status; or
v)         Any
other factor if the factor is not a health factor.
B)        Subsection
(d)(2)(A) does not prevent more favorable treatment of individuals with adverse
health factors in accordance with subsection (g).
3)         Discrimination
Directed at Individuals
Notwithstanding subsections (d)(1)
and (d)(2), if the creation or modification of an employment or coverage
classification is directed at individual participants or beneficiaries based on
any health factor of the participants or beneficiaries, the classification is
not permitted under this subsection (d) unless it is permitted under subsection
(g) (permitting favorable treatment of individuals with adverse health
factors). Thus, if an employer modified an employment-based classification to
single out, based on a health factor, individual participants and beneficiaries
and deny them health coverage, the new classification would not be permitted
under this Section. (45 CFR 146.121)
4)         This
subsection (d) is illustrated by the examples appearing at 45 CFR
146.121(d)(4).
e)         Nonconfinement and Actively-at-Work
Provisions
1)         Nonconfinement
Provisions
A)        General
Rule
Under subsections (b) and (c), a
plan or issuer may not establish a rule for eligibility (as described in
subsection (b)(1)(B)) or set any individual's premium or contribution rate
based on whether an individual is confined to a hospital or other health care
institution
(4).
e)         Nonconfinement and Actively-at-Work
Provisions
1)         Nonconfinement
Provisions
A)        General
Rule
Under subsections (b) and (c), a
plan or issuer may not establish a rule for eligibility (as described in
subsection (b)(1)(B)) or set any individual's premium or contribution rate
based on whether an individual is confined to a hospital or other health care
institution. In addition, under subsections (b) and (c), a plan or issuer may
not establish a rule for eligibility or set any individual's premium or
contribution rate based on an individual's ability to engage in normal life
activities, except to the extent permitted under subsections (e)(2)(B) and
(e)(3) (permitting plans and issuers, under certain circumstances, to
distinguish among employees based on the performance of services).
B)        Subsection
(e)(1)(A) is illustrated by the examples appearing at 45 CFR 146.121(e)(1)(ii).
2)         Actively-at-Work
and Continuous Service Provisions
A)        General
Rule
i)          Under
subsections (b) and (c) and subject to the exception for the first day of work
described in subsection (e)(2)(B), a plan or issuer may not establish a rule
for eligibility (as described in subsection (b)(1)(B)) or set any individual's
premium or contribution rate based on whether an individual is actively at work
(including whether an individual is continuously employed), unless absence from
work due to any health factor (such as being absent from work on sick leave) is
treated, for purposes of the plan or health insurance coverage, as being
actively at work.
ii)         Subsection
ction (b)(1)(B)) or set any individual's
premium or contribution rate based on whether an individual is actively at work
(including whether an individual is continuously employed), unless absence from
work due to any health factor (such as being absent from work on sick leave) is
treated, for purposes of the plan or health insurance coverage, as being
actively at work.
ii)         Subsection
(e)(2)(A)(i) is illustrated by the examples appearing at 45 CFR
146.121(e)(2)(B).
B)        Exception
for the First Day of Work
i)          Notwithstanding
the general rule in subsection (e)(2)(A), a plan or issuer may establish a rule
for eligibility that requires an individual to begin work for the employer
sponsoring the plan (or, in the case of a multiemployer plan, to begin a job in
covered employment) before coverage becomes effective, provided that such a
rule for eligibility applies regardless of the reason for the absence.
ii)         This
subsection (e)(2)(B) is illustrated by the examples appearing at 45 CFR
146.121(e)(2)(ii)(B).
3)         Relationship
to Plan Provisions Defining Similarly Situated Individuals
A)        Notwithstanding
subsection (e), a plan or issuer may establish rules for eligibility or set any
individual's premium or contribution rate in accordance with the rules relating
to similarly situated individuals in subsection (d). Accordingly, a plan or
issuer may distinguish in rules for eligibility under the plan between
full-time and part-time employees, between permanent and temporary or seasonal
employees, between current and former employees, and between employees
currently performing services and employees no longer performing services for
the employer, subject to subsection (d)
ed individuals in subsection (d). Accordingly, a plan or
issuer may distinguish in rules for eligibility under the plan between
full-time and part-time employees, between permanent and temporary or seasonal
employees, between current and former employees, and between employees
currently performing services and employees no longer performing services for
the employer, subject to subsection (d). However, other federal or Illinois
laws (including the COBRA continuation provisions and the Family and Medical
Leave Act of 1993 (29 USC 2601 et seq.)) may require an employee or the
employee's dependents to be offered coverage and set limits on the premium or
contribution rate even though the employee is not performing services. (45 CFR
146.121)
B)        Subsection
(e)(3)(A) is illustrated by the examples appearing at 45 CFR 146.121(e)(3)(ii).
f)         Nondiscriminatory Wellness
Programs – In General
A wellness program is a program of
health promotion or disease prevention. Subsections (b)(2)(B) and (c)(3)
provide exceptions to the general prohibitions against discrimination based on
a health factor for plan provisions that vary benefits (including cost-sharing
mechanisms) or the premium or contribution for similarly situated individuals
in connection with a wellness program that satisfies the requirements of subsections
(f) through (k).  The following definitions govern in applying the provisions
of subsections (f) through (k):
1)         Reward
Except where expressly provided
otherwise, references in this Section to an individual obtaining a reward
include both obtaining a reward (such as a discount or rebate of a premium or
contribution, a waiver of all or part of a cost-sharing mechanism, an
additional benefit, or any financial or other incentive) and avoiding a penalty
(such as the absence of a premium surcharge or other financial or nonfinancial
disincentive)
otherwise, references in this Section to an individual obtaining a reward
include both obtaining a reward (such as a discount or rebate of a premium or
contribution, a waiver of all or part of a cost-sharing mechanism, an
additional benefit, or any financial or other incentive) and avoiding a penalty
(such as the absence of a premium surcharge or other financial or nonfinancial
disincentive). References in this Section to a plan providing a reward include
both providing a reward (such as a discount or rebate of a premium or
contribution, a waiver of all or part of a cost-sharing mechanism, an
additional benefit, or any financial or other incentive) and imposing a penalty
(such as a surcharge or other financial or nonfinancial disincentive).
2)         Participatory
Wellness Programs
If none of the conditions for
obtaining a reward under a wellness program is based on an individual
satisfying a standard that is related to a health factor (or if a wellness
program does not provide a reward), the wellness program is a participatory
wellness program. Examples of participatory wellness programs are:
A)        A
program that reimburses employees for all or part of the cost for membership in
a fitness center;
B)        A
diagnostic testing program that provides a reward for participation in that
program and does not base any part of the reward on outcomes;
C)        A
program that encourages preventive care through the waiver of the copayment or
deductible requirement under a group health plan for the costs of, for example,
prenatal care or well-baby visits
ost for membership in
a fitness center;
B)        A
diagnostic testing program that provides a reward for participation in that
program and does not base any part of the reward on outcomes;
C)        A
program that encourages preventive care through the waiver of the copayment or
deductible requirement under a group health plan for the costs of, for example,
prenatal care or well-baby visits. (Note that, with respect to
non-grandfathered plans, 45 CFR 147.130 requires benefits for certain
preventive health services without the imposition of cost sharing.);
D)        A
program that reimburses employees for the costs of participating, or that
otherwise provides a reward for participating, in a smoking cessation program
without regard to whether the employee quits smoking;
E)        A
program that provides a reward to employees for attending a monthly, no-cost
health education seminar; and
F)         A
program that provides a reward to employees who complete a health risk
assessment regarding current health status, without any further action
(educational or otherwise) required by the employee with regard to the health
issues identified as part of the assessment. (See also 45 CFR 146.122 for rules
prohibiting collection of genetic information.)
3)         Health-Contingent
Wellness Programs
A health-contingent wellness
program is a program that requires an individual to satisfy a standard related
to a health factor to obtain a reward (or requires an individual to undertake
more than a similarly situated individual based on a health factor in order to
obtain the same reward). A health-contingent wellness program may be an
activity-only wellness program or an outcome-based wellness program
contingent wellness
program is a program that requires an individual to satisfy a standard related
to a health factor to obtain a reward (or requires an individual to undertake
more than a similarly situated individual based on a health factor in order to
obtain the same reward). A health-contingent wellness program may be an
activity-only wellness program or an outcome-based wellness program.
4)         Activity-Only
Wellness Programs
An activity-only wellness program
is a type of health-contingent wellness program that requires an individual to
perform or complete an activity related to a health factor in order to obtain a
reward but does not require the individual to attain or maintain a specific
health outcome. Examples include walking, diet or exercise programs, which some
individuals may be unable to participate in or complete (or have difficulty
participating in or completing) due to a health factor, such as severe asthma,
pregnancy or a recent surgery. See subsection (h) for requirements applicable
to activity-only wellness programs.
5)         Outcome-Based
Wellness Programs
An outcome-based wellness program
is a type of health-contingent wellness program that requires an individual to
attain or maintain a specific health outcome (such as not smoking or attaining
certain results on biometric screenings) in order to obtain a reward. To comply
with the rules of subsections (f) through (k), an outcome-based wellness
program typically has two tiers. That is, for individuals who do not attain or
maintain the specific health outcome, compliance with an educational program or
an activity may be offered as an alternative to achieve the same reward. This
alternative pathway, however, does not mean that the overall program, which has
an outcome-based component, is not an outcome-based wellness program
wellness
program typically has two tiers. That is, for individuals who do not attain or
maintain the specific health outcome, compliance with an educational program or
an activity may be offered as an alternative to achieve the same reward. This
alternative pathway, however, does not mean that the overall program, which has
an outcome-based component, is not an outcome-based wellness program. That is,
if a measurement, test or screening is used as part of an initial standard and
individuals who meet the standard are granted the reward, the program is
considered an outcome-based wellness program. For example, if a wellness
program tests individuals for specified medical conditions or risk factors
(including biometric screening such as testing for high cholesterol, high blood
pressure, abnormal body mass index, or high glucose level) and provides a
reward to individuals identified as within a normal or healthy range for these
medical conditions or risk factors, while requiring individuals who are
identified as outside the normal or healthy range (or at risk) to take
additional steps (such as meeting with a health coach, taking a health or
fitness course, adhering to a health improvement action plan, complying with a
walking or exercise program, or complying with a health care provider's plan of
care) to obtain the same reward, the program is an outcome-based wellness
program. See subsection (i) for requirements applicable to outcome-based
wellness programs. (45 CFR 146.121)
g)         Requirement for Participatory
Wellness Programs
A participatory wellness program,
as described in subsection (f)(2), does not violate the provisions of this Section
only if participation in the program is made available to all similarly
situated individuals, regardless of health status.
h)         Requirements for Activity-Only
Wellness Programs
A health-contingent wellness
program that is an activity-only wellness program, as described in subsection
ory wellness program,
as described in subsection (f)(2), does not violate the provisions of this Section
only if participation in the program is made available to all similarly
situated individuals, regardless of health status.
h)         Requirements for Activity-Only
Wellness Programs
A health-contingent wellness
program that is an activity-only wellness program, as described in subsection
(f)(4), does not violate the provisions of this Section only if all of the
following requirements are satisfied:
1)         Frequency
of Opportunity to Qualify
The program must give individuals
eligible for the program the opportunity to qualify for the reward under the
program at least once per year.
2)         Size of
Reward
The reward for the activity-only
wellness program, together with the reward for other health-contingent wellness
programs with respect to the plan, must not exceed the applicable percentage
(as defined in subsection (j)) of the total cost of employee-only coverage
under the plan. However, if, in addition to employees, any class of dependents
(such as spouses, or spouses and dependent children) may participate in the
wellness program, the reward must not exceed the applicable percentage of the
total cost of the coverage in which an employee and any dependents are enrolled.
For purposes of this subsection (h)(2), the cost of coverage is determined
based on the total amount of employer and employee contributions towards the
cost of coverage for the benefit package under which the employee is (or the
employee and any dependents are) receiving coverage.
3)         Reasonable
Design
The program must be reasonably
designed to promote health or prevent disease
olled.
For purposes of this subsection (h)(2), the cost of coverage is determined
based on the total amount of employer and employee contributions towards the
cost of coverage for the benefit package under which the employee is (or the
employee and any dependents are) receiving coverage.
3)         Reasonable
Design
The program must be reasonably
designed to promote health or prevent disease. A program satisfies this
standard if it has a reasonable chance of improving the health of, or
preventing disease in, participating individuals, and it is not overly
burdensome, is not a subterfuge for discriminating based on a health factor,
and is not highly suspect in the method chosen to promote health or prevent
disease. This determination is based on all the relevant facts and
circumstances.
4)         Uniform
Availability and Reasonable Alternative Standards
The full reward under the
activity-only wellness program must be available to all similarly situated
individuals.
A)        Under
this subsection (h)(4), a reward under an activity-only wellness program is not
available to all similarly situated individuals for a period unless the program
meets both of the following requirements:
i)          The
program allows a reasonable alternative standard (or waiver of the otherwise
applicable standard) for obtaining the reward for any individual for whom, for
that period, it is unreasonably difficult due to a medical condition to satisfy
the otherwise applicable standard; and
ii)         The
program allows a reasonable alternative standard (or waiver of the otherwise
applicable standard) for obtaining the reward for any individual for whom, for
that period, it is medically inadvisable to attempt to satisfy the otherwise
applicable standard
m, for
that period, it is unreasonably difficult due to a medical condition to satisfy
the otherwise applicable standard; and
ii)         The
program allows a reasonable alternative standard (or waiver of the otherwise
applicable standard) for obtaining the reward for any individual for whom, for
that period, it is medically inadvisable to attempt to satisfy the otherwise
applicable standard.
B)        While
plans and issuers are not required to determine a particular reasonable
alternative standard in advance of an individual's request for one, if an
individual is described in either subsection (h)(4)(A)(i) or (ii), a reasonable
alternative standard must be furnished by the plan or issuer upon the
individual's request or the condition for obtaining the reward must be waived.
C)        All
the facts and circumstances are taken into account in determining whether a
plan or issuer has furnished a reasonable alternative standard, including but
not limited to the following:
i)          If
the reasonable alternative standard is completion of an educational program,
the plan or issuer must make the educational program available or assist the
employee in finding such a program (instead of requiring an individual to find
such a program unassisted), and may not require an individual to pay for the
cost of the program;
ii)         The
time commitment required must be reasonable (for example, requiring attendance
nightly at a one-hour class would be unreasonable);
iii)        If
the reasonable alternative standard is a diet program, the plan or issuer is
not required to pay for the cost of food but must pay any membership or
participation fee;
iv)        If an
individual's personal physician states that a plan standard (including, if
applicable, the recommendations of the plan's medical professional) is not
medically appropriate for that individual, the plan or issuer must provide a
reasonable alternative standard that accommodates the recommendations of the
individual's personal physician with
ny membership or
participation fee;
iv)        If an
individual's personal physician states that a plan standard (including, if
applicable, the recommendations of the plan's medical professional) is not
medically appropriate for that individual, the plan or issuer must provide a
reasonable alternative standard that accommodates the recommendations of the
individual's personal physician with regard to medical appropriateness. Plans
and issuers may impose standard cost sharing under the plan or coverage for
medical items and services furnished pursuant to the physician's
recommendations.
D)        To the
extent that a reasonable alternative standard under an activity-only wellness
program is, itself, an activity-only wellness program, it must comply with the
requirements of this subsection (h) in the same manner as if it were an initial
program standard. (Thus, for example, if a plan or issuer provides a walking
program as a reasonable alternative standard to a running program, individuals
for whom it is unreasonably difficult due to a medical condition to complete
the walking program (or for whom it is medically inadvisable to attempt to
complete the walking program) must be provided a reasonable alternative
standard to the walking program.) To the extent that a reasonable alternative
standard under an activity-only wellness program is, itself, an outcome-based
wellness program, it must comply with the requirements of subsection (i),
including subsection (i)(4)(D).
E)        If
reasonable under the circumstances, a plan or issuer may seek verification,
such as a statement from an individual's personal physician, that a health
factor makes it unreasonably difficult for the individual to satisfy, or
medically inadvisable for the individual to attempt to satisfy, the otherwise
applicable standard of an activity-only wellness program
g subsection (i)(4)(D).
E)        If
reasonable under the circumstances, a plan or issuer may seek verification,
such as a statement from an individual's personal physician, that a health
factor makes it unreasonably difficult for the individual to satisfy, or
medically inadvisable for the individual to attempt to satisfy, the otherwise
applicable standard of an activity-only wellness program. Plans and issuers may
seek verification with respect to requests for a reasonable alternative
standard for which it is reasonable to determine that medical judgment is
required to evaluate the validity of the request.
5)         Notice
of Availability of Reasonable Alternative Standard
The plan or issuer must disclose
in all plan materials describing the terms of an activity-only wellness program
the availability of a reasonable alternative standard to qualify for the reward
(and, if applicable, the possibility of waiver of the otherwise applicable
standard), including contact information for obtaining a reasonable alternative
standard and a statement that recommendations of an individual's personal
physician will be accommodated. If plan materials merely mention that such a
program is available, without describing its terms, this disclosure is not
required. Sample language is provided in subsection (k), as well as in certain
examples of this Section. (45 CFR 146.121)
6)         The
provisions of this subsection (h) are illustrated by the example appearing at
45 CFR 146.121(f)(4)(vi).
i)          Requirements for Outcome-Based
Wellness Programs
A health-contingent wellness
program that is an outcome-based wellness program, as described in subsection
le language is provided in subsection (k), as well as in certain
examples of this Section. (45 CFR 146.121)
6)         The
provisions of this subsection (h) are illustrated by the example appearing at
45 CFR 146.121(f)(4)(vi).
i)          Requirements for Outcome-Based
Wellness Programs
A health-contingent wellness
program that is an outcome-based wellness program, as described in subsection
(f)(5), does not violate the provisions of this Section only if all of the
following requirements are satisfied:
1)         Frequency
of Opportunity to Qualify
The program must give individuals
eligible for the program the opportunity to qualify for the reward under the
program at least once per year.
2)         Size of
Reward
The reward for the outcome-based
wellness program, together with the reward for other health-contingent wellness
programs with respect to the plan, must not exceed the applicable percentage
(as defined in subsection (j)) of the total cost of employee-only coverage
under the plan. However, if, in addition to employees, any class of dependents
(such as spouses, or spouses and dependent children) may participate in the
wellness program, the reward must not exceed the applicable percentage of the
total cost of the coverage in which an employee and any dependents are
enrolled. For purposes of this subsection (i)(2), the cost of coverage is
determined based on the total amount of employer and employee contributions
towards the cost of coverage for the benefit package under which the employee
is (or the employee and any dependents are) receiving coverage.
3)         Reasonable
Design
The program must be reasonably
designed to promote health or prevent disease
rolled. For purposes of this subsection (i)(2), the cost of coverage is
determined based on the total amount of employer and employee contributions
towards the cost of coverage for the benefit package under which the employee
is (or the employee and any dependents are) receiving coverage.
3)         Reasonable
Design
The program must be reasonably
designed to promote health or prevent disease. A program satisfies this
standard if it has a reasonable chance of improving the health of, or
preventing disease in, participating individuals, and it is not overly
burdensome, is not a subterfuge for discriminating based on a health factor,
and is not highly suspect in the method chosen to promote health or prevent
disease. This determination is based on all the relevant facts and
circumstances. To ensure that an outcome-based wellness program is reasonably
designed to improve health and does not act as a subterfuge for underwriting or
reducing benefits based on a health factor, a reasonable alternative standard
to qualify for the reward must be provided to any individual who does not meet
the initial standard based on a measurement, test or screening that is related
to a health factor, as explained in subsection (i)(4).
4)         Uniform
Availability and Reasonable Alternative Standards
The full reward under the
outcome-based wellness program must be available to all similarly situated
individuals.
A)        Under
this subsection (i)(4), a reward under an outcome-based wellness program is not
available to all similarly situated individuals for a period unless the program
allows a reasonable alternative standard (or waiver of the otherwise applicable
standard) for obtaining the reward for any individual who does not meet the
initial standard based on the measurement, test or screening, as described in
this subsection (i)(4)
), a reward under an outcome-based wellness program is not
available to all similarly situated individuals for a period unless the program
allows a reasonable alternative standard (or waiver of the otherwise applicable
standard) for obtaining the reward for any individual who does not meet the
initial standard based on the measurement, test or screening, as described in
this subsection (i)(4).
B)        While
plans and issuers are not required to determine a particular reasonable
alternative standard in advance of an individual's request for one, if an
individual is described in subsection (i)(4)(A), a reasonable alternative
standard must be furnished by the plan or issuer upon the individual's request
or the condition for obtaining the reward must be waived.
C)        All
the facts and circumstances are taken into account in determining whether a
plan or issuer has furnished a reasonable alternative standard, including but
not limited to the following:
i)          If
the reasonable alternative standard is completion of an educational program,
the plan or issuer must make the educational program available or assist the
employee in finding such a program (instead of requiring an individual to find
such a program unassisted), and may not require an individual to pay for the
cost of the program.
ii)         The
time commitment required must be reasonable (for example, requiring attendance
nightly at a one-hour class would be unreasonable).
iii)        If
the reasonable alternative standard is a diet program, the plan or issuer is
not required to pay for the cost of food but must pay any membership or
participation fee
may not require an individual to pay for the
cost of the program.
ii)         The
time commitment required must be reasonable (for example, requiring attendance
nightly at a one-hour class would be unreasonable).
iii)        If
the reasonable alternative standard is a diet program, the plan or issuer is
not required to pay for the cost of food but must pay any membership or
participation fee.
iv)        If an
individual's personal physician states that a plan standard (including, if
applicable, the recommendations of the plan's medical professional) is not
medically appropriate for that individual, the plan or issuer must provide a
reasonable alternative standard that accommodates the recommendations of the
individual's personal physician with regard to medical appropriateness. Plans
and issuers may impose standard cost sharing under the plan or coverage for
medical items and services furnished pursuant to the physician's
recommendations.
D)        To the
extent that a reasonable alternative standard under an outcome-based wellness
program is, itself, an activity-only wellness program, it must comply with the
requirements of subsection (h) in the same manner as if it were an initial
program standard. To the extent that a reasonable alternative standard under an
outcome-based wellness program is, itself, another outcome-based wellness
program, it must comply with the requirements of this subsection (i), subject
to the following special rules:
i)          The
reasonable alternative standard cannot be a requirement to meet a different
level of the same standard without additional time to comply that takes into
account the individual's circumstances. For example, if the initial standard is
to achieve a BMI less than 30, the reasonable alternative standard cannot be to
achieve a BMI less than 31 on that same date
lowing special rules:
i)          The
reasonable alternative standard cannot be a requirement to meet a different
level of the same standard without additional time to comply that takes into
account the individual's circumstances. For example, if the initial standard is
to achieve a BMI less than 30, the reasonable alternative standard cannot be to
achieve a BMI less than 31 on that same date. However, if the initial standard
is to achieve a BMI less than 30, a reasonable alternative standard for the
individual could be to reduce the individual's BMI by a small amount or small
percentage, over a realistic period of time, such as within a year.
ii)         An
individual must be given the opportunity to comply with the recommendations of
the individual's personal physician as a second reasonable alternative standard
to meeting the reasonable alternative standard defined by the plan or issuer,
but only if the physician joins in the request. The individual can make a
request to involve a personal physician's recommendations at any time and the
personal physician can adjust the physician's recommendations at any time,
consistent with medical appropriateness.
E)        It is
not reasonable to seek verification, such as a statement from an individual's
personal physician, under an outcome-based wellness program that a health
factor makes it unreasonably difficult for the individual to satisfy, or
medically inadvisable for the individual to attempt to satisfy, the otherwise
applicable standard as a condition of providing a reasonable alternative to the
initial standard
reasonable to seek verification, such as a statement from an individual's
personal physician, under an outcome-based wellness program that a health
factor makes it unreasonably difficult for the individual to satisfy, or
medically inadvisable for the individual to attempt to satisfy, the otherwise
applicable standard as a condition of providing a reasonable alternative to the
initial standard. However, if a plan or issuer provides an alternative standard
to the otherwise applicable measurement, test or screening that involves an
activity that is related to a health factor, then the rules of subsection (h)
for activity-only wellness programs apply to that component of the wellness
program and the plan or issuer may, if reasonable under the circumstances, seek
verification that it is unreasonably difficult due to a medical condition for
an individual to perform or complete the activity (or it is medically
inadvisable to attempt to perform or complete the activity). (For example, if
an outcome-based wellness program requires participants to maintain a certain
healthy weight and provides a diet and exercise program for individuals who do
not meet the targeted weight, a plan or issuer may seek verification, as
described in subsection (i)(4)(D), if reasonable under the circumstances, that
a second reasonable alternative standard is needed for certain individuals
because, for those individuals, it would be unreasonably difficult due to a
medical condition to comply, or medically inadvisable to attempt to comply,
with the diet and exercise program, due to a medical condition.)
5)         Notice
of Availability of Reasonable Alternative Standard
The plan or issuer must disclose
in all plan materials describing the terms of an outcome-based wellness
program, and in any disclosure that an individual did not satisfy an initial
outcome-based standard, the availability of a reasonable alternative standard
to qualify for the reward (and, if applicable, the possibility of waiver of the
otherwise applica
ty of Reasonable Alternative Standard
The plan or issuer must disclose
in all plan materials describing the terms of an outcome-based wellness
program, and in any disclosure that an individual did not satisfy an initial
outcome-based standard, the availability of a reasonable alternative standard
to qualify for the reward (and, if applicable, the possibility of waiver of the
otherwise applicable standard), including contact information for obtaining a
reasonable alternative standard and a statement that recommendations of an
individual's personal physician will be accommodated. If plan materials merely
mention that such a program is available, without describing its terms, this
disclosure is not required. Sample language is provided in subsection (k), as
well as in certain examples of this Section. (45 CFR 146.121)
6)         This subsection
(i) is illustrated by the examples at 45 CFR 146.121(f)(4).
j)          Applicable Percentage
For purposes of subsections
(f) through (k), the applicable percentage is provided
in Section
356z.17(e)(iii) of the Code.
k)         Sample Language
The following language, or
substantially similar language, can be used to satisfy the notice requirement
of subsection (h)(5) or (i)(5): "Your health plan is committed to helping
you achieve your best health. Rewards for participating in a wellness program
are available to all employees. If you think you might be unable to meet a
standard for a reward under this wellness program, you might qualify for an
opportunity to earn the same reward by different means
sed to satisfy the notice requirement
of subsection (h)(5) or (i)(5): "Your health plan is committed to helping
you achieve your best health. Rewards for participating in a wellness program
are available to all employees. If you think you might be unable to meet a
standard for a reward under this wellness program, you might qualify for an
opportunity to earn the same reward by different means. Contact us at [insert
contact information] and we will work with you (and, if you wish, with your
doctor) to find a wellness program with the same reward that is right for you
in light of your health status." (45 CFR 146.121)
l)          More
Favorable Treatment of Individuals with Adverse Health Factors Permitted
1)         In Rules
for Eligibility
A)        Nothing
in this Section prevents a group health plan or group health insurance issuer
from establishing more favorable rules for eligibility (described in subsection
(b)(1)) for individuals with an adverse health factor, such as disability, than
for individuals without the adverse health factor. Moreover, nothing in this Section
prevents a plan or issuer from charging a higher premium or contribution with
respect to individuals with an adverse health factor if they would not be
eligible for the coverage were it not for the adverse health factor. (However,
other laws, including Illinois insurance laws, may set or limit premium rates;
these laws are not affected by this Section.)
B)        This subsection
(l)(1) is illustrated by the examples appearing at 45 CFR 146.121(g)(1)(ii).
2)         In Premiums
or Contributions
A)        Nothing
in this Section prevents a group health plan or group health insurance issuer
from charging individuals a premium or contribution that is less than the
premium (or contribution) for similarly situated individuals if the lower
charge is based on an adverse health factor, such as disability. (45 CFR
146.121)
B)        This subsection
.
2)         In Premiums
or Contributions
A)        Nothing
in this Section prevents a group health plan or group health insurance issuer
from charging individuals a premium or contribution that is less than the
premium (or contribution) for similarly situated individuals if the lower
charge is based on an adverse health factor, such as disability. (45 CFR
146.121)
B)        This subsection
(l)(2) is illustrated by the examples appearing at 45 CFR 146.121(g)(2)(ii).
m)        No Effect on Other Laws
Compliance with this Section is
not determinative of compliance with any other provision of the PHS Act
(including the COBRA continuation provisions) or any other Illinois or federal
law, such as the Americans With Disabilities Act. Therefore, although this Section
would not prohibit a plan or issuer from treating one group of similarly
situated individuals differently from another (such as providing different
benefit packages to current and former employees), other federal or Illinois
laws may require that two separate groups of similarly situated individuals be
treated the same for certain purposes (such as making the same benefit package
available to COBRA qualified beneficiaries as is made available to active
employees). In addition, although this Section generally does not impose new
disclosure obligations on plans and issuers, this Section does not affect any
other laws, including those that require accurate disclosures and prohibit
intentional misrepresentation. (45 CFR 146.121)
n)         Applicability Dates
1)         Generally
This Section applies for plan
years beginning on or after July 1, 2007
oyees). In addition, although this Section generally does not impose new
disclosure obligations on plans and issuers, this Section does not affect any
other laws, including those that require accurate disclosures and prohibit
intentional misrepresentation. (45 CFR 146.121)
n)         Applicability Dates
1)         Generally
This Section applies for plan
years beginning on or after July 1, 2007.
2)         Special
Rule for Self-Funded Nonfederal Governmental Plans Exempted Under 45 CFR
146.180
A)        If coverage
has been denied to any individual because the sponsor of a self-funded
nonfederal governmental plan has elected under 45 CFR 146.180 to exempt the
plan from the requirements of this Section, and the plan sponsor subsequently
chooses to bring the plan into compliance with the requirements of this Section,
the plan:
i)          Must
notify the individual that the plan will be coming into compliance with the
requirements of this Section, specify the effective date of compliance, and
inform the individual regarding any enrollment restrictions that may apply
under the terms of the plan once the plan is in compliance with this Section
(as a matter of administrative convenience, the notice may be disseminated to
all employees);
ii)         Must
give the individual an opportunity to enroll that continues for at least 30
days;
iii)        Must
permit coverage to be effective as of the first day of plan coverage for which
an exemption election under 45 CFR 146.180 (with regard to this Section) is no
longer in effect; and
iv)        May not
treat the individual as a late enrollee or a special enrollee.
B)        For
purposes of this subsection (n)(2), an individual is considered to have been
denied coverage if the individual failed to apply for coverage because, given
an exemption election under 45 CFR 146.180, it was reasonable to believe that
an application for coverage would have been denied based on a health factor. (45
CFR 146.121)
C)        This subsection
llee or a special enrollee.
B)        For
purposes of this subsection (n)(2), an individual is considered to have been
denied coverage if the individual failed to apply for coverage because, given
an exemption election under 45 CFR 146.180, it was reasonable to believe that
an application for coverage would have been denied based on a health factor. (45
CFR 146.121)
C)        This subsection
(n)(2) is illustrated by the examples appearing at 45 CFR 146.121(i)(2)(iii).

## Nearby sections

- [50 Ill. Adm. Code 20010.2001.1 Section 2001.1  Applicability](https://www.frixlaw.com/law-library/statutes/STATE_IL_IAC_T50_P20010_S2001_1.md)
- [50 Ill. Adm. Code 20010.2001.2 Section 2001.2  Definitions and Cross-References](https://www.frixlaw.com/law-library/statutes/STATE_IL_IAC_T50_P20010_S2001_2.md)
- [50 Ill. Adm. Code 20010.2001.8 Section 2001.8  Coverage of Preventive Health Services](https://www.frixlaw.com/law-library/statutes/STATE_IL_IAC_T50_P20010_S2001_8.md)
- [50 Ill. Adm. Code 20010.2001.9 Section 2001.9  Prohibiting Discrimination Against Participants and Beneficiaries Based on Health Status](https://www.frixlaw.com/law-library/statutes/STATE_IL_IAC_T50_P20010_S2001_9.md)
- [50 Ill. Adm. Code 20010.2001.10 Section 2001.10  Summary of Benefits and Coverage and Uniform Glossary](https://www.frixlaw.com/law-library/statutes/STATE_IL_IAC_T50_P20010_S2001_10.md)
- [50 Ill. Adm. Code 20010.2001.12 Section 2001.12  Cost-Sharing](https://www.frixlaw.com/law-library/statutes/STATE_IL_IAC_T50_P20010_S2001_12.md)

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Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/STATE_IL_IAC_T50_P20010_S2001_9. Check the current official text before relying on it. Not legal advice.