A Look at the Affordable Care Act: Workplace Wellness Incentives

A Look at the Affordable Care Act: Workplace Wellness IncentivesEach month AssuredPartners NL will discuss a different aspect of the Affordable Care Act. Stay tuned for more updates on the second Thursday of each month. Click here for more Affordable Care Act blogs.

Wellness programs have many benefits – they keep employees healthy and productive, and help keep insurance costs down. With the Affordable Care Act reforms, there are now new guidelines to regulate these workplace wellness programs. Beginning this year, these regulations allow employers to increase incentives or rewards offered as part of a wellness program, as long as the program follows certain guidelines, determined by the type of wellness program. Wellness programs fall under two types, either:

Participatory wellness programs:
Are open to any employee who wants to participate. If any reward is offered, employees do not have to meet certain specific goals to obtain it. Employees receive the reward simply for enrolling. These types of programs can include: smoking cessation, gym membership reimbursements, diagnostic tests and screenings, and health education classes or seminars. Participatory wellness programs can be reimbursed, subsidized or incentivized by employers as a reward, and there is no limit on the type of reward as long as the reward is not dependent on a certain outcome.

Health-contingent wellness programs:
Reward employees for achieving a specific health goal. This category can be further broken down into two subcategories:

  1. Activity-only wellness programs: require an individual to perform or complete a health-related activity to obtain a reward. While employees are obligated to complete the activity to receive the reward, they do not have to achieve a specific health outcome.
  2. Outcome-based wellness programs: require an individual to meet certain health outcomes – like quitting smoking, to receive the reward.

With health-contingent programs, there is a maximum reward that can be received. For most programs in 2014, the rewards can equal up to 30 percent of the cost of the health coverage for an employee and dependents. Smoking cessation programs can provide rewards up to 50 percent of the employees cost of coverage.

While workplace wellness programs can help employees achieve a better quality of life and lower insurance costs, they are not mandated. Employers are not required to offer a program to employees, and thus these regulations only apply if your organization offers a wellness program.

Does your organization offer a wellness program? If you’re looking to start a program, or interested in tips for improving an existing program, the AssuredPartners NL Employee Benefits team can help. To learn more or contact an agent, visit: AssuredPartners NL Employee Benefits.

Source: Zywave

This post is not intended to be exhaustive, nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.

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