Is Your Employer Worksite Medical Clinic a Group Health Plan?
Worksite medical clinics, some offering round-the-clock access to medical providers via telemedicine, seem to be growing in popularity. Promoters tout cost savings resulting from what would otherwise be lost productivity (employees whiling away afternoons waiting to see their private doctors or having to drive long distances to have blood drawn for routine laboratory work) and expenses otherwise borne by self-insured group health plans at a far higher cost per service. Some worksite clinics have existed for decades for reasons other than cost-savings – for example, to ensure immediate treatment is available to employees if work-related injuries occur or illnesses or as part of a workplace well-being program.
The variety of reasons for having worksite clinics has caused at least as much variety in worksite clinic designs – from those that provide only first aid treatment to employees if workplace injuries occur to those that provide a full array of primary medical care services to employees and family members despite the source of injury or illness. There also are a variety of legal considerations applicable when employers provide medical care at the worksite – particularly if the arrangement constitutes an employer group health plan.
An employer group health plan is an arrangement established by an employer to provide or pay for medical care – something all worksite clinics do. Group health plans generally are subject to specific disclosure and reporting requirements under the Employee Retirement Income Security Act (ERISA), continuation requirements under the Consolidated Omnibus Budget Reconciliation Act (COBRA), special tax treatment conditions under the Internal Revenue Code (IRC), privacy and other requirements under the Health Insurance Portability and Accountability Act (HIPAA), and health care reform provisions under the Patient Protection and Affordable Care Act (ACA). That said, a worksite clinic might be exempt from some or all of these requirements.
Unfortunately, whether a worksite clinic is exempt from one or another compliance requirement is a murky issue. If the worksite clinic does more than treat minor workplace injuries and illnesses during work hours, it will be subject to ERISA, including the requirements of issuing a summary plan description and filing an annual Form 5500. It also will be subject to COBRA, unless it is primarily providing free first aid treatment to employees for workplace injuries and illnesses. The employer must consider how it will satisfy these disclosure, reporting and coverage continuation requirements or manage the risk of violating those requirements. How would the employer respond to a terminated employee’s assertion of a COBRA right to continued access to the clinic?
An ERISA-covered worksite clinic might still escape other requirements unique to group health plans under HIPAA and the ACA if it qualifies as an excepted benefit by virtue of being a worksite medical clinic. However, the enforcement agencies have not defined a worksite medical clinic for these purposes. Given the nature of the other enumerated excepted benefits – all of which are secondary or incidental to group health benefits – it is unlikely that a worksite clinic providing services (beyond workplace first aid for employees) that supplant benefits ordinarily provided under a group health plan would qualify as an excepted benefit. How would the worksite clinic comply with the ACA’s coverage mandates – particularly regarding employees and family members not enrolled in the employer’s otherwise compliant group health plan?
In addition to litigation that can arise over group health plan noncompliance, the enforcement agencies – primarily the Department of Labor, Internal Revenue Service and Department of Health and Human Services, can impose significant penalties on employers for violating the myriad of compliance requirements applicable to group health plans.
The bottom line is that an employer maintaining a workplace clinic (or considering one) needs to understand the group health plan compliance risks and the general risks associated with doing so and take reasonable steps to mitigate those risks.
