June 3, 2013
Final regulations on wellness programs and rewards for group health plans were issued on May 29, 2013 by the Departments of Treasury, Labor and Health and Human Services. These regulations apply to insured and self-insured group plans, both grandfathered and non-grandfathered, for plan years beginning on or after January 1, 2014.
The final regulations confirmed the maximum wellness reward amounts that will be allowed.
There are two types of Wellness Programs: Participatory and Health-Contingent
1. Participatory Wellness Programs
Any Participatory Wellness program reward is based only on participation, not on meeting specific health standards. Examples of these types of programs include health club discounts or rewards for completing a health assessment. There are no limits on the rewards for Participatory Wellness programs.
2. Health-Contingent Wellness Programs
Health-Contingent Wellness programs require individuals to meet a health standard or participate in a health program to receive a reward. Every individual eligible for the program must be given an opportunity to qualify for the reward once a year. The reward cannot exceed the maximum amounts noted above.
Health-Contingent programs may be (a) Activity-Only programs or (b) Outcome-Based programs.
(a) Activity-Only Wellness Programs
(b) Outcome-Based Wellness Programs
Reasonable Alternative Standards
If an individual does not qualify for a Health-Contingent reward, a reasonable alternative standard or waiver must be available.
As an example, a reasonable alternative for an individual who failed to meet a BMI standard might be participation in a weight loss program or the requirement to reduce BMI by a small amount or percentage over a year’s time.
Any materials provided to employees that describe wellness programs must include information about the availability of reasonable alternatives and contact information to request an alternative. Reasonable alternatives do not need to be defined in advance and can be determined on an individual basis.
May 10, 2013
On May 8, 2013, the Department of Labor (DOL) provided temporary guidance and model notices that employers can use to inform their employees about the Exchanges, which will be available January 1, 2014. Please note that the Department of Health and Human Services (HHS) now calls the Exchange the "Health Insurance Marketplace," and DOL refers to the notice as the "Employee Notice of Coverage Options."
The original deadline for providing this notice to employees was March 1, 2013. The effective date has been changed to October 1, 2013 to coincide with the Exchange or Marketplace open enrollment period, which also begins on that date. Employers who want to start providing notices sooner can follow this temporary guidance and use these model notices. However, employers are not required to provide notices under this temporary guidance and can wait until formal guidance is provided later this year.
The notice requirement applies to all employers that are subject to the Fair Labor Standards Act (FLSA). Most employers fall into this category, but there are exceptions. The following link may assist employers in making this determination: http://www.dol.gov/elaws/esa/flsa/scope/screen24.asp
Recipient and Distribution Requirements
This one-time notice must be provided to all current employees as of October 1, 2013 and to new employees as they are hired. For 2014, if the notice is provided within 14 days of an employee's start date, the notice will be considered as having been provided at the time of hiring.
Employers must provide a notice to all full-time and part-time employees, regardless of whether the employee is enrolled in an employer-sponsored medical plan. Employers must provide this notice even if they do not offer any health coverage to employees.
The notice does not have to be provided to employees' dependents.
Notices must be in writing and can be delivered electronically by the employer if the ERISA standards for electronic delivery are met.
What Must be Included in the Notice
There are two versions of the model notice:
Employers can use the model notices or create their own notice as long as the notice includes the following required information:
Changes to COBRA Notice
Employees and dependents who become eligible for COBRA will also have the option to purchase coverage through the Exchange/Marketplace and potentially receive a premium subsidy. The model COBRA notice that employers and COBRA administrators use has been revised to include information about the Marketplace.
May 5, 2013
On March 11, HHS announced it is delaying the “employee choice” option in the Small Business Health Options Program (SHOP) Exchanges from 2014 to 2015 for the 33 states where the Federal government will be running the Exchanges.
The employee choice option will allow employers to determine how much they will contribute toward the cost of employee coverage and offer their employees a choice of Exchange plans from different carriers at a certain metal level (Bronze, Silver, etc.).
Due to this delay, in states where the Federal government is developing the Exchange, in 2014, small employers will choose an Exchange plan and their employees will decide whether or not to enroll in that plan. Employers will not be able to offer their employees a choice of plans until 2015.
Exchanges being developed by states may choose to offer employee choice in 2014, or they may choose to delay implementation of that feature until 2015. The employee choice option will be available in all SHOP Exchanges for plan years beginning on or after January 1, 2015.