Implementing and expanding employer wellness programs presents a significant opportunity for the United States to enhance the health of its workforce and manage healthcare costs more effectively. The Affordable Care Act (ACA) recognizes this potential and introduces new incentives, building upon existing wellness program frameworks to promote and support healthier workplaces across the nation.
In a collaborative effort, the Departments of Health and Human Services (HHS), Labor, and the Treasury have jointly proposed rules to refine wellness programs. These rules are designed to reflect the modifications to wellness provisions enacted by the Affordable Care Act and to foster the development of well-structured, consumer-focused wellness programs within group health coverage. These proposed regulations are intended to take effect for plan years commencing on or after January 1, 2014.
The proposed rules reinforce the importance of workplace wellness programs, including “participatory wellness programs.” These programs are generally accessible to all employees, regardless of their health status. Examples of participatory programs include initiatives that offer reimbursements for fitness center memberships, reward employees for attending free monthly health education seminars, or incentivize the completion of health risk assessments without mandating further actions.
Furthermore, the rules detail revised standards for “health-contingent wellness programs” that are nondiscriminatory. These programs typically require individuals to meet specific health-related benchmarks to qualify for a reward. Illustrative examples of health-contingent programs include those that reward employees who abstain from or reduce tobacco use, or programs that incentivize achieving specific cholesterol levels or weight goals, while also providing alternative paths to rewards for those who do not initially meet these targets but engage in required additional steps.
Consumer Protection Measures in Wellness Programs
To safeguard consumers against potential unfair practices, the proposed regulations stipulate that health-contingent wellness programs must adhere to specific guidelines. These include:
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Programs must be reasonably designed to promote health or prevent disease: To meet this criterion, a program must offer a viable and reasonable alternative method for individuals who do not meet the initial health standard to still qualify for the reward. The program should have a legitimate chance of improving health outcomes or preventing illness and should not impose undue burdens on participants.
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Programs must be designed to be accessible to all similarly situated individuals: Reasonable alternative means of qualifying for rewards must be available to individuals whose medical conditions make it excessively challenging or medically inadvisable for them to meet the standard health requirement.
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Individuals must receive clear notification of alternative qualification methods: The proposed rules include new sample language intended to simplify understanding and improve the likelihood that individuals who are eligible for alternative reward qualification methods will contact their plan or issuer to request them.
Employer Flexibility and Incentives
The proposed rules also implement changes introduced by the Affordable Care Act that increase the maximum permissible reward under a health-contingent wellness program. This reward has been raised from 20 percent to 30 percent of the cost of health coverage. Moreover, the maximum reward can reach as high as 50 percent for programs specifically designed to prevent or reduce tobacco use, further incentivizing employers to prioritize these health-focused initiatives.
Evidence strongly suggests that workplace health programs possess the potential to foster healthier behaviors, enhance employees’ health knowledge and skills, facilitate access to essential health screenings, immunizations, and follow-up care, and minimize workplace exposure to hazardous substances and conditions that can lead to illness and injury. The proposed rules are intentionally flexible, not dictating specific types of wellness programs employers must offer, and seek public input on additional standards for wellness programs to further protect consumers while encouraging innovation.
Learn More
For more in-depth information, you can read the full proposed rule on wellness programs.
Posted on: November 20, 2012
Last updated: December 4, 2012
