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The Internal Revenue Service, in conjunction with the Labor and Health and Human Services departments, Nov. 20 released proposed regulations (REG-122707-12) that would increase the maximum permissible reward of a health-contingent wellness program offered through a group health plan from 20 percent to 30 percent.
The regulations also proposed increasing the maximum allowed reward to 50 percent for wellness programs intended to prevent or reduce tobacco use, the agencies said.
The proposed rules include clarification on the reasonable design of health wellness programs and the reasonable alternatives they must offer in order to avoid prohibited discrimination, the agencies said.
“The Affordable Care Act recognizes that well-run, equitable workplace wellness programs allow workers to access services that can help them and their families lead healthier lives,” said Secretary of Labor Hilda Solis in remarks released with the proposed rules. “Employers, too, can benefit from reduced costs associated with a healthier workforce,“ Solis said.
The proposed regulations would continue to divide wellness programs into two categories: “participatory wellness programs,” which make up the majority of wellness programs, the agencies said, and “health contingent wellness programs.”
The agencies define participatory wellness programs as programs that are available to all similarly situated individuals and that either do not provide a reward or do not include any conditions for obtaining a reward that are based on an individual satisfying a standard that is related to a health factor.
Examples of such programs include fitness center memberships or monthly, no-cost health education seminars, the agencies said. These participatory programs are not required to meet the five requirements applicable to health-contingent wellness programs, the agencies said.
However, health contingent wellness programs must meet the following five regulatory requirements, according to the proposed regulations:
• Frequency of opportunity to qualify: Individuals eligible for the program must receive the opportunity to qualify for the reward at least once per year.
• Size of reward: The proposed rules would continue to limit the total amount of the reward for health-contingent wellness programs with respect to a plan, whether offered alone or coupled with the reward for other health-contingent wellness programs.
• Uniform availability and reasonable alternative standards: The same, full reward must be available to individuals who qualify for the program. A reasonable alternative standard must be provided to individuals who qualify by satisfying the program's otherwise applicable standard.
• Reasonable design: The health-contingent wellness programs must be reasonably designed to promote health or prevent disease, must not be overly burdensome, must not be a subterfuge for discrimination based on a health factor, and must not be highly suspect in the method chosen to promote health or prevent disease.
• Notice of other means of qualifying for the reward: Plans and issuers would be required to disclose the availability of other means of qualifying for the reward or the possibility of waiver of the otherwise applicable standard in all plan materials describing the terms of a health-contingent wellness program.
The proposed changes are intended to be consistent with the Affordable Care Act and would take effect beginning on or after Jan. 1, 2014, the agencies said.
The proposed rules would 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, according to the proposed rules.
Comments on various aspects of the proposed regulations' changes to wellness program incentives are due by Jan. 25.
Text of an HHS news release on ACA guidance changes is at http://op.bna.com/dt.nsf/r?Open=emcy-928nku.
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