On May 23, 2013, the DOL, Treasury and HHS finalized the HIPAA Nondiscriminatory Wellness Programs Regulations that were proposed in November 2012, clarifying what will work and what will not work for 2014 and beyond.
The accompanying news release stated that the “final rules ensure flexibility for employers by increasing the maximum reward that may be offered under appropriately designed wellness programs.”
The Final Regulations address the various types of wellness programs. There are two primary categories:
- Participatory wellness programs either do not provide a reward or do not include any conditions for obtaining a reward based on a standard related to a health factor.
- Health-contingent wellness programs either require an individual to satisfy a health factor-related standard to obtain a reward or require an individual to undertake more than a similarly situated individual based on a health factor in order to obtain the same reward. There are two types of health contingent wellness programs: activity-only and outcome-based.
The health-contingent wellness programs must comply with five requirements under HIPAA:
- Annual qualification
- A limit on the amount of the reward
- Availability to similarly situated individuals, including a reasonable alternative standard
- Reasonable design to promote health or prevent disease
- Publication of any alternative means for qualifying or waiver
The Final Regulations include examples that apply the HIPAA five-factor test to various wellness program designs. The final rules will be effective for plan years beginning on or after Jan. 1, 2014.
To view the final rule visit: http://www.ofr.gov/inspection.aspx.
