Good News For Employee Health

On May 29, 2013, the Departments of Treasury, Labor, and Health and Human Services issued the final rule on employment-based wellness programs.  The final rule clarifies and continues the various classification of wellness programs, including “participatory wellness programs” and “health contingent wellness programs.” 

Participatory wellness programs require only that employees participate in the activities required by the employer.  Examples of participatory wellness programs might include attending regular wellness seminars.  By contrast, health contingent wellness programs are those that require employees to reach certain milestones, like smoking cessation or body mass index goals. 

The new regulations increase the maximum incentives that may be provided by employers, although few employers are near these maximums today.  The maximum permissible reward under a health contingent wellness program is increased from 20% to 30% of the cost of coverage.  The maximum permissible reward for programs designed to prevent or reduce tobacco use is increased to 50%. 

HHS indicated that the regulations are also designed to protect consumers by requiring that these programs be reasonably designed, uniformly available to all similarly-situated individuals, and accommodate recommendations made at any time by an individual’s physician based on medical appropriateness.  These accommodations include reasonable alternatives offered for those individuals who are unable to achieve the desired wellness results.

The regulations also ensure that programs are not overly burdensome and do not result in discrimination based on a health factor. 

According to the comments to the regulations, the intention of the Departments is that every individual participating in the program should be able to receive the full amount of any reward or incentive, regardless of any health factor. 

The agencies indicated that they anticipate issuing future guidance to provide clarity and modifications to these final rules. 

If you would like additional information on the specific requirements of the new rule or on wellness programs in general, please contact Thomas N. Hutchinson at (317) 238-6254.