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.