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Wellness Program Rewards from Partner Agency Insurance Services

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Wellness Program Rewards

Oct 2, 2013

Workplace Wellness Programs are on the increase! Learn about how the federal government is proposing to reward your business for participation.

Workplace Wellness Programs are on the increase! Learn about how the federal government is proposing to reward your business for participation.

Wellness Program Rewards in the Workplace

The U.S. Departments of Health and Human Services, Labor, and the Treasury have proposed rules that would provide incentives for participating in workplace wellness programs. Employees could receive a reward (premium discounts or rebates, lower cost-sharing requirements, extra benefits) that equals up to 30 percent of the total cost of health coverage. This would increase to a maximum of 50 percent if they participate in programs to prevent or reduce tobacco use. There would also be protections in place to prevent discrimination against employees.

The final regulations generally divide wellness programs into two categories.

First, programs that do not require an individual to meet a standard related to a health factor in order to obtain a reward. These programs are not considered to discriminate under the HIPAA nondiscrimination regulations and therefore, are permissible without conditions under such rules. These are known as participatory wellness programs.

Examples of a participatory wellness programs include a fitness center reimbursement program, a diagnostic testing program that does not base rewards on test outcomes, a program that waives cost-sharing for pre-natal or well-baby visits, a program that reimburses employees for the cost of smoking cessation aids regardless of whether the employee quits smoking, and a program that provides rewards for attending health education seminars.

The second category of wellness programs  consists of programs that require individuals to satisfy a standard related to a health factor in order to obtain a reward. These are known as health-contingent wellness programs.

Examples of health-contingent wellness programs include  programs that require an individual to obtain, or maintain, a certain health outcome in order to obtain a reward. This could be becoming or being a non-smoker, attaining certain results on biometric screenings, exercising a certain amount weekly, having a cholesterol count under 200, etc. Although such a premium or benefit reward may discriminate based on a health factor, an exception outlined in paragraph (f)(2) of the final rules permits such programs if the program provides five different safeguards enumerated in the rules.

Are all employment-based wellness programs required to check for compliance with the HIPAA nondiscrimination provisions?

No. Many employers offer a wide range of programs to promote health and prevent disease. For example, some employers may choose to provide or subsidize healthier food choices in the employee cafeteria, provide pedometers to encourage employee walking and exercise, pay for gym memberships, or ban smoking on employer facilities and campuses. A wellness program is subject to the HIPAA nondiscrimination rules only if it is, or is part of, a group health plan. If an employer operates a wellness program as an employment policy separate from its group health plan(s), the program may be covered by other Federal or State nondiscrimination laws, but it is not subject to the HIPAA nondiscrimination regulations.

More guidance is expected early next year concerning consumer protections that may be needed to prevent the program from being used as discrimination based on health status.

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