Final Wellness Regulations Create New Program Categories and Complications

The Departments of Labor, Treasury and Health and Human Services (the “Departments”) recently published final Affordable Care Act (“ACA”) regulations on wellness programs, effective in 2014. The regulations retain the existing distinction between participatory and health-contingent wellness programs, but clarify that many wellness programs have been incorrectly classified as participatory. The regulations also split health-contingent wellness programs into two subcategories subject to new requirements. While reviewing programs for consistency with these regulations, plans must simultaneously track state and Equal Employment Opportunity Commission regulatory efforts.

Right now, health care cost containment is a top priority for employers, employees and the Departments. In this environment, attention has inevitably turned to employer wellness programs and their potential for improving employee health, reducing long-term costs and providing immediate returns on investment. A recent RAND Corporation report confirms this trend, finding that more than 60% of employers with 100 or more employees sponsor a wellness program.

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