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.