Wellness Program Rules Finalized
June 26, 2013
Employer-sponsored wellness programs have surged in popularity in recent years, with 86 percent of employers in a recent survey reporting that they offered wellness-based incentives in 2011. Such programs may get a boost from new rules issued in June under the Affordable Care Act. The rules, issued jointly by the Internal Revenue Service, the Department of Labor, and the Department of Health and Human Services, increase the maximum allowable incentive from 20 to 30 percent of the total cost of group health insurance coverage. And, for programs targeted at helping employees quit smoking, the maximum reward (or penalty) may be as high as 50 percent.
The final rules make distinctions between several types of wellness plans.
- Participatory wellness programs either don't provide a reward or don't include any conditions for obtaining rewards that require individuals to satisfy a standard relating to a health factor.
- Health-contingent wellness programs require an individual to satisfy a standard relating to a health factor in order to obtain a reward, or to do more than others need to do based on a health factor. The rules further define two subcategories of these programs. Activity-only programs require the individual to do something (complete an education or exercise program, for instance) but don't require them to meet a specific standard. Outcome-based programs, however, require the individual to attain or maintain a specific health outcome such as not smoking or a certain cholesterol level.
The rules provide a number of safeguards to ensure that individuals are provided alternatives to prescribed activities or standards if they have health-related reasons for not meeting program requirements, and to protect against employers or insurers using wellness programs to discriminate against participants based on their health status.
The new rules apply to insured and self-insured group health plans and take effect for plan years beginning on or after January 1, 2014.
Towers Watson has a well-written 10-page summary of the final rule.
Vice President, Regulatory Affairs
Director, Tax Policy
- House and Senate Approve FY16 Budget Resolutions
- NACUBO Submits Comments to CFPB on Safe Student Account Scorecard
- Senate Committee Seeks Feedback on Policy Papers
- 2015 Higher Education Accounting Forum
April 26-28, 2015
- 2015 CAO and CBO Collaborations
August 3-4, 2015
- 2015 Planning and Budgeting Forum
September 28-29, 2015
- WEBCAST: NACUBO LIVE!: The Future Chief Business Officer
Tuesday, April 28, 2015 11:00AM ET
- WEBCAST: Analytics that Support Planning, Budgeting, and Results
Thursday, April 30, 2015 1:00PM ET
- WEBCAST: Corporate Sponsorships: Getting it Right
Thursday, May 14, 2015 1:00PM ET
- WEBCAST: Lessons Learned in Communicating Financial Information Effectively
Monday, May 18, 2015 1:00PM ET
- ON-DEMAND: Looking Under the Hood: Using Web-based Tools for Evaluating Institutional Financial Aid Policy
- ON-DEMAND: VIRTUAL: 2014 Annual Meeting
- A Guide to College and University Budgeting: Foundations for Institutional Effectiveness, 4th ed. - by Larry Goldstein
- NACUBO's Guide to Unitizing Investment Pools - by Mary S. Wheeler
- Managing and Collecting Student Accounts and Loans - by David R. Glezerman and Dennis DeSantis