Implementing and expanding employer wellness programs presents a significant opportunity to enhance the health of the nation and manage healthcare expenditure effectively. The Affordable Care Act (ACA) recognizes this potential and introduces new incentives, building upon existing wellness program frameworks to foster and support healthier workplace environments.
In alignment with these objectives, the Departments of Health and Human Services (HHS), Labor, and the Treasury have jointly proposed regulations concerning wellness programs. These proposed rules are designed to reflect the amendments to current wellness provisions enacted by the Affordable Care Act. The overarching goal is to encourage the development and implementation of well-structured, consumer-protective wellness programs within group health coverage plans. These regulations are intended to take effect for plan years commencing on or after January 1, 2014.
These proposed regulations reinforce the support for workplace wellness programs, including “participatory wellness programs.” These programs are generally accessible to all individuals, irrespective of their health status. Examples of participatory programs include initiatives that offer reimbursements for fitness center memberships, rewards for attending monthly health education seminars (at no cost), or incentives for completing health risk assessments without mandates for further actions.
Furthermore, the rules delineate revised criteria for “health-contingent wellness programs” that are nondiscriminatory. These programs typically necessitate individuals to meet specific health-related benchmarks to qualify for a reward. Illustrative examples of health-contingent programs encompass those rewarding individuals who abstain from or reduce tobacco consumption. They also include programs that incentivize achieving specific cholesterol levels or weight targets, while also providing pathways for those not meeting these targets to earn rewards by undertaking defined additional steps.
Consumer Protection Measures in Wellness Programs
To safeguard consumers from potential unfair practices, the proposed regulations incorporate several essential rules for health-contingent wellness programs:
- Programs Designed to Promote Health: Wellness programs must be thoughtfully designed to genuinely promote health or prevent disease. To meet this criterion, programs must offer a viable and reasonable alternative method for individuals who do not initially meet the standard based on a measurement, test, or screening to still qualify for the reward. Programs should demonstrate a reasonable likelihood of improving health or preventing disease and should not impose undue burdens on participants.
- Availability to All Similarly Situated Individuals: Programs must be reasonably designed to ensure availability to all individuals in similar situations. Reasonable alternative means of qualifying for rewards must be provided to individuals for whom meeting the specified health-related standard is unreasonably difficult due to medical conditions or is medically contraindicated.
- Clear Notice of Alternative Qualification Methods: Individuals must receive clear and understandable notice regarding the opportunity to qualify for the same reward through alternative means. The proposed rules include updated sample language aimed at enhancing clarity and increasing the likelihood that individuals eligible for alternative qualification methods will contact their plan or issuer to request them.
Enhancing Employer Flexibility and Incentives
The proposed regulations also enact changes within the Affordable Care Act that increase the maximum allowable reward under a health-contingent wellness program. This increases the limit from 20 percent to 30 percent of the cost of health coverage. Moreover, the maximum reward can be further elevated, reaching up to 50 percent for programs specifically designed to prevent or reduce tobacco use.
Evidence indicates that workplace health programs hold substantial promise for fostering healthy behaviors, enhancing employees’ health knowledge and skills, facilitating access to necessary health screenings, immunizations, and follow-up care, and minimizing 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. The agencies are seeking public comments on potential additional standards for wellness programs to further protect consumers.
Further Resources
For more detailed information, the complete proposed rule on wellness programs is available for review.
Posted on: November 20, 2012
Last updated: December 4, 2012
