Affordable Care Act's new wellness program guidelines

By Higginbotham on February 25 , 2014

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Earlier this month, we shared ideas for heart health wellness programs in honor of Heart Health Month. And today, we’re continuing the wellness conversation by alerting you to new proposed rules in the Affordable Care Act that may help you launch a highly effective wellness program in 2014.

First, let’s start with the basics. There are two types of wellness programs:

  1. Participatory wellness programs (PWPs) must comply with HIPAA nondiscrimination requirements as long as (1) the participant isn't required to satisfy any further standards, and (2) program participation is available to all similarly situated individuals regardless of health status. (Think reimbursements for gym memberships or free health seminars).
  2. Health-contingent wellness programs (HCWPs) use rewards to get individuals to meet a specific health standard. Examples include rewards for employees who reduce tobacco products and/or lower their cholesterol levels. There are two types of HCWPs – those that are activity only, in which an employee is required to complete a defined set of activities and outcome-based, in which the employee must actually achieve a desired result, such as smoking cessation.

Second, let’s look at the major change for 2014 – the allowed financial stake:

The new rules allow employers to increase the amount employees can be rewarded or penalized based on their participation in wellness programs, results or other factors. Employers will be able to increase their employees’ financial stakes from 20 percent of the cost of their health premiums to 30 percent effective for programs that start in 2014.

Third, let’s look at some of the rules designed to protect employees:

  • The programs must prevent disease or promote health by not being “overly burdensome for individuals.”
  • The programs must provide reasonable alternate means for individuals to qualify for rewards if they don’t meet standards based on “measurements, tests or screenings.”
  • In particular, individuals who have identified medical conditions that make it difficult to meet specific health standards require an alternative way to qualify for rewards. You must also give plenty of notice for alternative methods that qualify for the same reward.

What are some current wellness program trends?

Popular workplace wellness trends include programs designed to decrease smoking. These programs are offered by 48 percent of respondents to a Wellness Practices Survey by ERC, a human resources organization. ERC notes that other trends include holistic initiatives that treat employees’ mental and physical well-being together. Examples of holistic trends include yoga and mindfulness techniques. Buck Consultants (a Xerox company) published a wellness infographic that states, “Sponsors who increase their wellness incentives the most, experience better health care cost reduction.”

Do you believe in wellness?

Higginbotham believes in wellness. In fact, our company was just named a 2014 Healthiest Employer in Central Texas and North Texas by Austin Business Journal and Dallas Business Journal, respectively – due in large part to the wellness program that we offer to our employees. Contact us if you would like assistance with setting up a wellness program for your own workforce.

Tags: Corporate Wellness


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