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Implementation of the ACA: Proposed Rules for Employer-Based Wellness Programs

by Leah Greene, JD, LLM on December 3rd, 2012

The Obama Administration issued notices of proposed rule-making (“NPRM”) for implementation of the Affordable Care Act. The proposed rules for employer-based wellness programs allow for plans to vary premiums for participants who meet specific wellness standards. There are two types of wellness plans: participatory wellness plans available to all participants, such as discounted gym memberships, and “health-contingent” programs that reward participants for meeting a standard based on health factors, such as maintaining a normal blood pressure.

The health-contingent plans are obviously more controversial and must be non-discriminatory. To be considered non-discriminatory, the plan must include the following five factors: (1) participants must be eligible for at least one award at least once a year; (2) the maximum reward may not exceed 30% of the total cost of coverage; (3) the awards must be available to all similarly situated individuals, and there must be reasonable alternatives for those for whom it is medically inadvisable or unreasonably difficult to meet a set standard; (4) programs must be reasonably designed to promote health or prevent disease and may not be a ruse for increased charges; and (5) programs that state methods for reward qualifications must also provide alternatives.

These programs are controversial because they could potentially discriminate against people with prohibitive health conditions, act as a nanny-type program, or serve as a ploy for additional charges. On the other hand, these programs could increase the general health of the participating employees and reduce health insurance costs.

For further discussion regarding the proposed rule-making, read this article.

To leave a comment with the NPRM regarding the standards for health-contingent programs, click here.

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