Final Rules on Workplace Wellness Programs

The Affordable Care Act (ACA) includes provisions to encourage the use of wellness programs related to group health coverage. Effective for plan years beginning on or after Jan. 1, 2014, ACA adopts the existing HIPAA nondiscrimination requirements for health-contingent wellness programs, while also increasing the maximum reward that can be offered under these programs. On May 29, 2013, the Departments of Labor, Health and Human Services and the Treasury (Departments) released final regulations that implement ACA’s nondiscrimination requirements for wellness programs. The final regulations clarify and reorganize the rules outlined in previous proposed regulations. They are intended to ensure that every individual participating in a wellness program can receive the full amount of any reward or incentive, regardless of any health factor. Specifically, the final regulations:  Formally adopt the proposed nondiscrimination rules for health-contingent wellness programs, such as giving individuals an opportunity to qualify for the reward each year and providing an alternative standard or waiver for individuals with health conditions;  Divide health-contingent wellness programs into two categories: activity-only wellness programs and outcome-based wellness programs; and  Increase the permissible reward for meeting a health-related standard to 30 percent of the total cost of employee-only coverage (or 50 percent, if the program is designed to prevent or reduce tobacco use). The regulations apply to both grandfathered and non-grandfathered group health plans and group health insurance coverage for plan years beginning on or after Jan. 1, 2014.