Feds Release Health Reform Law Wellness Program Rules

Today, November 20, 2012, the US Department of Health & Human Services (HHS) released guidance, the first of its kind, on provisions of the federal health reform law relating to employer-sponsored workplace wellness programs.

The federal health reform law, also known as the Affordable Care Act, creates new incentive structures and builds on current workplace wellness policies and programs in an effort to promote healthier workplaces and encourage further development of employer-sponsored wellness initiatives.

The proposed rule addresses standards for both participatory wellness programs – programs generally available without regard to one’s health status – and health-contingent wellness programs, which typically require participants to meet certain health outcomes goals in order to receive a reward.

Under the rule, employers may increase the maximum reward amount under health-contingent wellness programs from 20 percent to 30 percent of the cost of health coverage.  The maximum reward may be further increased to 50 percent for programs intended to prevent or reduce tobacco use.

The proposed rule would also require health-contingent wellness programs to follow a set of standards to avoid penalties. These include:

-Programs must be reasonably designed to promote health or prevent disease, meaning that 1) there must be available reasonable means of qualifying for a reward for any employee who does not meet a standard based on the measurement, test, or screening, and 2) there must be a reasonable chance of improving health or preventing disease and not be overly burdensome for individuals.

-Programs must be reasonably designed to be available to all similarly situated employees, meaning that there must be available alternative means of qualifying for the reward if an employee’s medical conditions make it unreasonably difficult to attain the health outcome.

-Individuals who might not qualify to attain rewards through traditional courses of action must be given notice of the opportunity to qualify for the same reward through other means.  The proposed rule offer new sample language that employers can use in communicating the availability of these rewards.

These rules are part of a broader set of health reform guidance released by the federal government today.  Rules on health insurance market dynamics, including a prohibition on pre-existing condition exclusions and actuarial value of health plans, as well as rules pertaining to coverage for essential health benefits were also released.