True to their word, the feds have released the proposed new health reform regs for wellness plans before the end of 2012. Here’s what employers should know.
Like most proposed reform regs, the wellness rules were a joint effort by HHS, DOL and Treasury Departments, and they would apply to plan years beginning on or after January 1, 2014.
While these proposed regs aren’t the final rule on wellness changes under the reform law, they’ll give employers a pretty good picture of what the final rules are likely to be.
Incentives up to 50%
The most significant changes in the feds’ proposed regs involve the financial incentives employers can offer to workers for participating in company-sponsored wellness programs. These include:
- The maximum incentive for “standards-based” wellness programs will jump to 30% of the cost of employees’ coverage (currently it’s 20%), and
- The maximum incentive for programs designed to prevent or reduce tobacco-usage can be up to 50% of the cost of employees’ healthcare coverage.
In addition, reasonable alternatives must be provided to employees with medical conditions — or conditions where it’s medically inadvisable to comply the wellness program’s requirements.
If the reasonable alternative is an education program, plans can’t require workers to find or cover the cost of that program on their own.
Additionally, a health plan can’t require employees to cover the admission cost of a diet program. However, the plan does not have to cover the food costs for such a program.
The feds will also allow employers to get physician verification from an employee to prove that a reason alternative to a wellness program is necessary — unless that employee’s medical condition is obvious or known to the plan or insurer already.
Sample language, comment period
The proposed regs offered the following new sample language employers can use to let employees know how finding a reasonable alternative to achieve a reward under the company’s wellness program will be handled:
Your health plan is committed to helping you achieve your best health status. Rewards for participating in a wellness program are available to all employees. If you think you might be unable to meet a standard for a reward under this wellness program, you might qualify for an opportunity to earn the same reward by different means. Contact us at [insert contact information] and we will work with you to find a wellness program with the same reward that is right for you in light of your health status.
The feds are accepting public comments, which should be identified by “Wellness Programs,” on these proposed regs in a number of formats until Jan. 25, 2013.