Wellness Program Guidance Issued

As discussed in prior News to Use articles, many employers implement wellness programs to increase worker productivity and decrease health care costs. The Departments of Labor, Treasury and Health and Human Services issued final regulations addressing wellness programs under health care reform.

The new rule sets parameters on which wellness program designs will be considered non-discriminatory. The regulations apply to both health-contingent wellness programs (through which a participant must meet a certain health goal) and participatory wellness programs (through which all may participate regardless of health status). The rule also describes the standards these programs must meet to be considered nondiscriminatory.

To satisfy the new regulations, a wellness program must

  • Give individuals the opportunity to qualify at least one time per year;
  • Limit the reward to not exceed 30% of the total cost of employee-only coverage under the plan (50% if the program is a smoking-cessation program);
  • Make the reward available to all similarly situated individuals;
  • Confirm that the program is reasonably designed to promote health or prevent disease;
  • Provide for a waiver or reasonable alternatives (a health contingent program must offer an alternative whenever requested, and a participatory program must offer an alternative only when for medical reasons participation is inadvisable or difficult);
  • Be disclosed in all plan materials describing the program, including the availability of a waiver or alternative standard for qualifying for the program.

Employers now have detailed guidance on how to set up a nondiscriminatory wellness programs. These sort of programs will likely become a more and more popular benefit for employers to offer their employees.

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