HHS releases final rules for wellness programs

Last month, the U.S. Departments of Health and Human Services, Labor and the Treasury announced the final rules regulating employer-sponsored wellness programs.

Faced with mounting healthcare costs, employers of all kinds across the country have adopted employee wellness initiatives aimed at encouraging preventative care and healthy lifestyles by incentivize workers to get checkups, join gyms, quit smoking or achieve other similar feats.

Previously, regulations governing wellness programs established guidelines for how much rewards and penalties imposed on employees can amount to. 

The final rule, which goes into effect in 2014, mainly provides more clarity as to what constitutes a compliant wellness program. In addition to “participatory wellness programs,” which are generally available to employees regardless of their health status, the rule establishes the requirements of “health-contingent wellness programs.” These initiatives require individuals to satisfy certain standards or requirements to receive rewards. 

There are two types of health-contingent wellness programs:

• Active-only programs require that individuals complete certain activities, like attending a class or participating in a sporting event.
• Outcome-based programs reward workers demonstrate that they’ve achieved a certain end goal, like having lowered cholesterol levels.

Just as these programs can reward good health, they can also penalize workers for failing to improve their well-being. Under the federal rule, employers cannot impose rewards or penalties higher than 30 percent of total cost of coverage. That portion is 50 percent for programs designed to prevent or reduce tobacco use.