We have heard much regarding the advantages found in the ACA for those with existing wellness plans. HHS has released the final regulations regarding wellness plans and the limits of rewards/penalties associated with employee contributions to health insurance premiums.
Here’s what has NOT changed: The permissible level of rewards/penalties are 20 percent of the cost of coverage, to up to 30 percent for general health rewards and up to 50 percent for rewards linked to tobacco non-use. Further, please remember the five factors for health contingent programs:
- The total incentive (or penalty) available under the program cannot exceed 20 percent of the total costs of coverage under the employer’s group health plan.
- The program must be reasonably designed to promote health or prevent disease.
- Employees (and dependents, if applicable) must be given an opportunity to qualify for the incentive (or avoid the penalty) at least annually.
- All similarly-situated individuals must be given an opportunity to qualify for the incentive (or avoid the penalty) and must have access to a reasonable alternative standard if appropriate.
- All plan material describing the program must disclose that an alternative standard is available.
Stephanie Smithey and Timothy G. Verrall of Ogletree Deakins have prepared an excellent primer on wellness plans and the ACA. You can read it here.