Guidance for Wellness Programs

  1. The Affordable Care Act and Wellness Programs
  2. Major Change: Increasing the maximum reward that can be provided under the health-contingent wellness program from 20% to 30% (possibly up to 50%, if DHHS deems appropriate) starting January 1, 2014.
  3. Reward/Discount is for the total cost of the employee-only coverage under the plan
  4. Applies to both grandfatheredand non-grandfathered plans
  5. If a Wellness program is for the purpose of tobacco cessation/reduction, the proposed rules increase the maximum reward to 50%
  6. Still not sure if/how rewards will be distributed to dependents
  1. Types of Wellness Programs
  2. Participatory Wellness Program – program that does not offered a reward or does not condition receipt of reward on a individual satisfying a health status requirement. Example: Gym membership reimbursement/discount
  3. Health-Contingent Wellness Program – wellness program that conditions a receipt of a reward on an individual satisfying a standard that is related to a health factor.

Example: attain certain biometric results or meeting targets for exercise or participation

-These types of programs are the programs discussed under the new guidance legislation

  1. Uniform Availability and Reasonable Alternative Standard
  2. Health-contingent wellness programs must be made available to all similarly situated individuals
  3. A reasonable alternative standard (or waiver) for obtaining the reward must be provided for those individuals whom it is unreasonably difficult, due to a medical condition, to meet the otherwise applicable standard or for whom it is medically inadvisable to attempt to satisfy the otherwise applicable standard.
  4. Plan issuers are not required to establish a particular alternative in advance of an individual’s specific request for one
  5. Prior unsuccessful attempts do not preclude the requirement to provide a reasonable alternative
  6. Educational Programs – if alternative is an educational program, plan issuer must make the program available instead of requiring the individual to find the program unassisted. Can’t require individual to pay for the cost of the program
  7. Diet Programs – if reasonable alternative is diet program, the issuer is not required to pay for food, but must pay for the program
  8. Physician Verification – unreasonable for a plan or issue to seek verification of a claim that is obviously valid based on the nature of the individual’s medical condition; however the plan issuer may seek verification of claims that require the use of medical judgment to evaluate.
  9. Health-Contingent Wellness Programs must be reasonably designed to promote health or prevent disease, not be overly burdensome and not be a maneuver for discrimination based on a health factor.
  1. Frequency of Opportunity to Qualify - Individuals must have opportunity to qualify for the reward once per year
  1. Must be voluntary. To be voluntary, an employer may not require participation nor penalize employees who do not participate