Final rules related to employment-based wellness programs have been published, representing the last step in implementing the Affordable Care Act. Assistant Secretary of Labor Phyllis C. Borzi answered three frequently-asked questions about the rules:
Why are these rules important?
The final rules promote health and provide a way for employers to reward behaviors that could improve health and ultimately limit the growth of health-care costs. Employees will have greater access to programs that promote healthy lifestyles, as well as incentives for complying with the requirements of a wellness program. Those incentives might include reimbursement for fitness center membership fees; a reward for attending monthly, no-cost health education seminar programs; programs that provide a reward to those who do not use (or decrease use of) tobacco; and programs that reward those who achieve a health outcome such as cholesterol level or weight goal, as well as to those who fail to meet targets but take certain additional healthy actions.
Could employees be penalized for having poor health?
No. The final rules forbid discrimination based on a health factor and ensure individuals are protected from unfair or discriminatory underwriting practices. They require that health-contingent wellness programs be reasonably designed and uniformly available to all similarly situated individuals. The rules also clarify that reasonable alternative standards must be available for all workers who do not meet an outcome-based initial standard. If an employee's personal physician says that a plan standard is not medically appropriate for that individual, the plan or issuer must provide a reasonable alternative standard that accommodates the physician's recommendations.
How will the rules benefit employers?
The final rules ensure flexibility for employers by increasing the maximum reward that may be offered under appropriately designed wellness programs, including outcome-based programs. The rules allow employers to offer up to a 30 percent incentive for health-contingent wellness programs, and an additional 20 percent incentive for wellness programs designed to prevent or reduce tobacco use. The final rules do not dictate the types of wellness programs employers can offer. If an employer chooses to offer a participation-based wellness program, for example, the rules only require an employer to offer the program to all similarly situated individuals. If an employer offers a health-contingent program, it must ensure the program is designed to promote health and prevent disease, and is not a subterfuge for discrimination or underwriting based on a health factor.