HHS Rules on Wellness Incentives for 2014

HHS Rules on Wellness Incentives for 2014

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Final Regulation on Wellness Released May 29, 2013 The Obama Administration released a final regulation this week about changes to employer-sponsored wellness programs. The final rule is remarkably similar to the proposed rule released

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this past winter and increases the maximum allowable reward for a health-contingent bona fide wellness program from 20% of premium value to 30%. Furthermore, for wellness programs designed to prevent tobacco use, the maximum allowable reward value is now 50%. One concern that the Administration has struggled with in the development of the final rule was that some voluntary health organizations and consumer groups have charged that health-contingent wellness programs are discriminatory. To address this issue, the final rule clarifies a requirement that has already existing under federal wellness program rules: If a person cannot physically meet health-contingent wellness program goals, the employer-sponsored plan “must provide a reasonable alternative standard that accommodates the recommendations of the individual’s personal physician.” Furthermore, employers still have

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to abide by other laws intended to prevent discrimination, like the Americans with Disabilities Act of 1990. The final rule will be published in the Federal Register on June 3 and will become

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effective 60 days later; however, it impacts group wellness programs on or after January 1, 2014. The Administration stated when it released the final rule that it anticipates issuing further guidance on wellness programs, either in the form of sub-regulatory guidance, such as a frequently asked questions document, or, if needed, via minor changes to the actual final rule.

In addition to the regulation, the Administration released the text of a wellness program report to Congress. It was conducted by the RAND Corporation for the Department of Labor and was required by the health reform law. The report states: “Most employers who offer workplace wellness programs regard them as a viable strategy to contain healthcare costs. A review of the literature identified randomized controlled trials that found workplace wellness programs did result in significant decreases in healthcare costs, including a savings in medical costs ranging from $11 to $626 per year. The employer survey found that 60 percent of employers offering a wellness program stated that their programs reduced healthcare costs, and around four-fifths reported that they decreased absenteeism and increased productivity.” However, the study also notes that most employers do not formally evaluate the effectiveness of their wellness programs, and that overall cost savings may not be statistically significant.