Wellness Programs and the Affordable Care Act

Wellness Programs and the Affordable Care Act

Estimated reading time: 3 minutes


If you have been following our blog, you know that health care spending can be effectively controlled with the offering of employer wellness programs. To encourage employers to promote wellness programs and support healthier workplaces, the Affordable Care Act features new incentives while also building on existing wellness program policies. The new regulations, proposed by the Departments of Health and Human Services (HHS), Labor and the Treasury, encourage wellness programs offerings in group health coverage.

Health-Contingent Wellness Programs

The rules continue to support workplace wellness programs while also outlining amended standards for nondiscriminatory “health-contingent wellness programs.” This generally requires individuals to meet specific standards related to health to receive a reward.

Health-contingent wellness programs, such as programs that reward employees who do not use to decrease their use of tobacco, and programs that reward employees who achieve specified cholesterol levels or weight are seeing an increase in popularity in workplaces across the country.

Protection from Unfair Practices

The new regulations require health-contingent wellness programs to abide by certain rules to protect employees from unfair practices. These rules include:

  1. Health-contingent wellness programs are to be reasonably designed to promote wellness and/or prevent illness. “Reasonably designed” is defined by the Department of Labor as a program that offers “a different, reasonable means of qualifying for the reward to any individual who does not meet the standard based on the measurement, test or screening. Programs must have a reasonable chance of improving health or preventing disease and not be overly burdensome for individuals.”
  2. Programs must also be reasonably designed to be available to all employees of similar situations, offering reasonable alternatives to those whose conditions make it difficult or inadvisable to meet expectations.
  3. Employees must be given notice of any opportunities to qualify for the offered rewards through other means. New sample language is included in the regulations to ensure everyone is able to understand what is being communicated and increase participation.

Flexibility for Employers

Changes in the ACA increases the maximum permissible reward from 20% to 30% of the cost of provided health coverage and increases the maximum reward to up to 50% for programs intended to prevent or reduce the use of tobacco.

It has been proven that workplace health programs not only promote healthy behavior and improve health knowledge and skills amongst employees but also help employees receive the necessary health screening and immunizations and follow-up care for a healthy lifestyle. With healthy employees, businesses are seeing increased productivity, decreased absenteeism and health benefits savings.




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