Affordable Care Act Regulations on Wellness Programs Released: What Employers and Employees Need to Know
By Andrew Wheeler
Director of eCommerce
CIBC of Illinois, Inc.
Like it or not, The Affordable Care Act is upon us. Many of us in the industry know that cost can be controlled in the benefits world by engaging in well-designed and implemented wellness programs for employees. We also know that it isn’t easy to get employees engaged in these initiatives, so we come up with incentives to entice (coerce) employees into addressing their health. Thankfully, there are parts of this law that are designed to encourage wellness programs in group health benefit settings, and employers need to know that there are specific limitations with these programs that will go into effect in January 2014.
Regardless of the type of wellness program, every individual in the program should have the opportunity to get the full amount of any incentive or reward regardless of any personal health factors. Keep in mind that these regulations apply to both grandfathered and non-grandfathered plans with plan years beginning on or after January 2014.
Participatory Wellness Programs
Participatory programs are wellness programs that, among other things, reimburse for the cost of health clubs, participation in monthly wellness meetings or seminars, and completing a health risk assessment. The member does not need to take further action beyond the initial action(s), and the final ACA rules tend to support these wellness programs. In essence, these types of initiatives comply with nondiscrimination requirements “as long as participation is made available to all similarly situated individuals regardless of health status.” It is important to note that there is no maximum amount of award on participatory wellness programs.
Health Contingent Wellness Programs
The final regulations for health contingent wellness programs, meaning those programs that require plan participants to satisfy a required standard related to a health factor in order to receive a reward, are capped at 30 percent of the total employee-only premium (50 percent if reduced tobacco use is a criterion).
Within the health contingent area, there are two separate categories that need to be considered for nondiscrimination purposes. Activity-only wellness programs require a plan participant to complete an activity (walking, diet, exercise), whereas an outcome based program requires one to attain/maintain a certain outcome (smoking, exercise, etc…). Outcome-based programs, however, require the member to achieve and maintain a particular outcome to receive the reward (smoking cessation, positive biometrics, etc….).
Non-discrimination rules apply differently depending on which program type is offered by the employer. Outcome-based programs have to offer a “Reasonable alternative standard” for achieving the reward for a broader group of participants than if an activity-based program is utilized.
Call us today for more information about wellness programs, especially ACA compliant programs geared to benefit you and your employees. It’s all part of the Solutions Approach that CIBC is known for.
This article is intended for informational purposes only and should not be construed as legal advice. Please consult with a legal professional for legal opinions.
To get more information on CIBC of Illinois, visit us at http://www.CIBCINC.Com or call toll free 877-936-3580.