Two of the major changes that the ACA is bringing in this regard are:
- Codifying the HIPAA requirements for health-contingent wellness programs
- Increasing the maximum reward that can be offered to participants
Here is an overview of the 5 standards set out by ACA regarding the design of health-contingent wellness programs, as well as rules regarding the reward:
Standard #1: Frequency of Opportunity to Qualify
To remain in compliance, these programs must provide eligible individuals with the opportunity to qualify for the reward at least once per year.
Standard #2: Size of Reward
Under the proposed regulations, the total reward cannot exceed a specified percentage of the total cost of employee-only coverage under the plan.
The ACA’s changes increase the maximum reward from 20 percent to 30 percent of the cost of health coverage.
Standard #3: Uniform Availability and Reasonable Alternative
Consistent with HIPAA regulations, the reward under a health-contingent wellness program must be available to all similarly situated individuals.
In order for that requirement to be met, a reasonable alternative standard for obtaining the reward must be provided to certain individuals. These individuals may include ones that have a medical condition that makes meeting the initial standards unreasonably difficult.
Standard #4: Reasonable Design
The proposed regulations enable plans and issuers the flexibility to be creative when designing these wellness programs.
However, while they must be reasonably designed to promote health or prevent disease, they must not be overly burdensome for individuals.
Standard #5: Notice of Other Means of Qualifying for the Reward
As is often the case when it comes to the success of Employee Benefit-related programs, communication is key! Plans and issues must disclose the availability of other ways to qualify for the reward in plan materials that provide details regarding the wellness program.
However, in a document such as a Summary of Benefits and Coverage where the wellness program might be mentioned without listing the standards, this disclosure is not required.
I hope that you find this information helpful as you seek to understand how the Affordable Care Act will impact your workplace wellness programs in the near future.
As additional details are released and regulations are finalized, please stay tuned to CBG Benefits!
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