The Departments of Treasury, Labor and Health and Human Services jointly issued final regulations on June 3, 2013 addressing wellness programs under the Affordable Care Act (the “ACA”) and the HIPAA non-discrimination rules. Generally, the HIPAA nondiscrimination provisions prohibit group health plans from charging similarly situated individuals different premiums or imposing different deductible, copayment or other cost sharing requirements based upon a health factor. However, there is an exception that allows plans to offer wellness programs. Effective January 1, 2014, the regulations permit employers to reward their employees with as much as 30% of the total cost of medical coverage (up from 20%) if they meet certain health-contingent goals, and up to 50% for health contingent wellness programs designed to prevent or reduce tobacco use. Rewards can take many forms, such as premium discounts or surcharges, reduced cost sharing, enhanced benefits, gift cards or deposits to Health Savings or Health Reimbursement Accounts.
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