Are Your Free or Discounted Flu Shots to Employees Compliant with the ACA?
As the inevitable cold and flu season approaches, many employers are looking for ways to provide free or discounted flu shots to their employees. What many employers do not consider is whether the offering of free or discounted flu shots (or similar benefits) is subject to the Affordable Care Act (ACA).
In general, providing flu shots to employees constitutes a “wellness program” that provides medical care. This is true even if the flu shots are not explicitly provided as part of an employer’s wellness program. And if a wellness program provides medical care, the wellness program itself will be a “group health plan” subject to the ACA. Medical care generally includes diagnostic procedures such as x-rays, blood tests, and certain immunizations, including flu shots. In other words, if an employer’s wellness plan requires certain blood tests for an employee to receive a benefit (i.e., discounted premiums), the program is a “group health plan” subject to the ACA.
Fortunately, an employer may offer wellness benefits (including flu shots) to its employees without entangling itself in the ACA, under limited circumstances:
- An employer may limit its offering of free or discounted flu shots to employees who are participants in the employer’s larger group health plan. The group health plan may need to be amended to include the wellness benefit (flu shots).
- An employer may facilitate flu shots on site at the employer’s place of business, at full cost to all employees.
- An employer may choose to use a combination of (1) and (2): it may facilitate flu shots on site to all employees but require employees who are not participants in its group health plan to pay for the flu shots at full cost and provide the flu shots for free or at a discounted rate for those employees who are participants in the employer’s group health plan.
Note that if the wellness program (i.e., discounted flu shots) is offered to all employees, regardless of whether they participate in the employer-provided group health plan, the wellness program will likely be deemed a non-compliant group health plan under the ACA. Noncompliance with the ACA can result in substantial fines of up to $100 per person, per day of noncompliance. Accordingly, it is important that employers regularly review their wellness plans to ensure compliance.