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
- NACUBO Responds to FASB's NFP Proposal
- Results Are In: The 2014 NACUBO Tuition Discounting Study
- NLRB Dismisses Union Bid from Northwestern Football Players
- WEBCAST: Legislative Lunchcast: A 30-Minute Washington Update from NACUBO
Wednesday, September 9, 2015 12:00PM ET
- ON-DEMAND: Developing Your Campus Distance Learning Strategy
- ON-DEMAND: A Just-in-Time Webcast to Explain FASB’s NFP Reporting Proposal
- ON-DEMAND: Decoding ED's Cash Management Proposal
- ON-DEMAND: Corporate Sponsorships: Getting it Right
- ON-DEMAND: Analytics that Support Planning, Budgeting, and Results
- 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