Benefits

Feds Set Guidelines for Health Reform Wellness Plans

By Rita Pyrillis

May. 30, 2013

A set of federal rules targeting discrimination in employer wellness programs could have some companies scrambling to redesign their benefits plans in time for fall enrollment, experts say.

The U.S. Department of Health and Human Services issued the regulations, which were enacted under the Affordable Care Act on May 29. The rules give employers more flexibility to charge higher insurance premiums to workers who don’t meet certain health goals, such as lowering their body mass index or cholesterol. 

Under the new rules, which take effect Jan. 1, 2014, employers must provide “reasonable alternatives” to employees who can’t meet those goals but still want the discount or reward. The final rules also raise the maximum dollar amount of rewards offered to employees who meet specific health standards and outcomes to 30 percent of their medical plan premiums and up to 50 percent of total premium costs for incentives tied to smoking prevention or weight-loss programs.

“Before, employers had to show a medical condition that prevented them from meeting the wellness goals, but now it doesn’t matter,” says Sharon Cohen, a principal with Buck Consultants. “I could just be overweight or a thin person with an abnormally high body mass index. Plans haven’t been designed that way. It may seem like a subtle change, but for some employers it has significance.”

According to Steve Wojcik, vice president of the National Business Group on Health, the regulations place an added administrative and cost burden on employers and could mean that some companies scale back or eliminate their wellness program.

“These programs already abide HIPAA rules, which we think is sufficient,” he says, referring to the Health Insurance Portability and Accountability Act.

“This adds additional complexity and cost. Employers might decide that it’s not worth investing the time and effort to find an alternative for employees, or that it’s not worth keeping the program if too many people try to take advantage of this.”

Rita Pyrillis is Workforce’s senior editor. Comment below or email editors@workforce.com. Follow Pyrillis on Twitter at @RitaPyrillis.

Rita Pyrillis is a writer based in the Chicago area.

About Workforce.com

blog workforce

We build robust scheduling & attendance software for businesses with 500+ frontline workers. With custom BI reporting and demand-driven scheduling, we help our customers reduce labor spend and increase profitability across their business. It's as simple as that.

Book a call
See the software

Related Articles

workforce blog

Benefits

EEOC says that employers legally can offer incentives to employees to get vaccinated in almost all instances

If you’re an employer looking to get as many of your employees vaccinated as possible, you can rest eas...

ADA, CDC, COVID-19, EEOC, GINA, pandemic, vaccinated

workforce blog

Benefits

Fixing some common misconceptions about HIPAA

Ever since the CDC amended its COVID-19 guidance to say that the fully vaccinated no longer need to wea...

COVID-19, health care, HIPAA, human resources, wellness

workforce blog

Benefits

We are in the midst of a public mental health crisis; how employers can help

Do not ignore these issues or your employees who are living with them. Mental health illnesses are no d...

ADA, benefits, Coronavirus, FMLA, mental health, paid time off