The Department of Health and Human Services (HHS) said its final rule on employment-based wellness programs, released yesterday, supports workplace health promotion and prevention as a means to reduce the burden of chronic illness, to improve health, and to limit growth of health care costs, all while ensuring that individuals "are protected from unfair underwriting practices that could otherwise reduce benefits based on health status."
The final rule continues to support "participatory wellness programs," which generally are available without regard to an individual’s health status. These programs reimburse or reward employees for such initiatives as joining a fitness center, attending health education seminars, or completing a health risk assessment with no obligation to take further action.
The rules also outline standards for nondiscriminatory "health-contingent wellness programs." These generally reward individuals who meet a specific standard related to their health; for example, quitting or cutting down on tobacco use; achieving a specified cholesterol level, weight, or body mass index; or, if the individual fails to meet these goals, taking certain other healthy actions.
The maximum reward that employers may offer employees under appropriately designed wellness programs is 30% of the total cost of employee-only coverage under the plan, except for tobacco-use program rewards, which max out at 50%. The final rule also requires that health-contingent wellness programs be reasonably designed, be uniformly available to all similarly situated individuals, and accommodate recommendations made at any time by an individual’s physician based on medical appropriateness.
The final rule, issued jointly by HHS, the Internal Revenue Service, and the Department of Labor, will be effective for plan years beginning on or after Jan. 1, 2014.
Meanwhile, a recent Wall Street Journal article reported that nearly 90% of employers offer incentives, financial rewards, or prizes to employees who work toward specified wellness goals, up from 57% in 2009. The article continues with pros and cons of popular types of programs.
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