The Manufacturing Law Blog provides timely commentary on issues of importance to manufacturers and distributors. Contributors from the law firm of Robinson & Cole LLP are corporate compliance and litigation attorney, Jeff White; environmental, health and safety attorney, Pam Elkow; and labor and employment attorney, Nicole Bernabo
On Wednesday, May 29, 2013, the U.S. Departments of Health and Human Services, Labor and the Treasury jointly released final rules on employment-based wellness programs. The final rules support workplace health promotion and prevention as a means to reduce the burden of chronic illness, improve health, and limit growth of health care costs, while ensuring that individuals are protected from unfair underwriting practices that could otherwise reduce benefits based on health status. Other than promoting a healthy workforce, there are healthy monetary incentives worth learning about.
Effective January 1, 2014, manufacturing employers can charge workers as much as 30% of their medical plan premiums for failing to meet wellness incentive goals, up 10% from current levels. While these incentives are enticing, the final rules clarify that outcome-based financial incentives must be widely available to program participants. A “participatory wellness program” is one which is generally available without regard to an individual’s health status. These include, for example, programs that reimburse for the cost of membership in a fitness center; that provide a reward to employees for attending a monthly, no-cost health education seminar; or that provides a reward to employees who complete a health risk assessment without requiring them to take further action.
The rules also outline amended standards for nondiscriminatory “health-contingent wellness programs,” which generally require individuals to meet a specific standard related to their health to obtain a reward. Examples of health-contingent wellness programs include programs that provide a reward to those who do not use, or decrease their use of, tobacco, or programs that provide a reward to those who achieve a specified cholesterol level or weight as well as to those who fail to meet that biometric target but take certain additional required actions.
Manufacturing employers who have incorporated outcome-based wellness program as part of their group health plan should consider reviewing the new regulations carefully to ensure their programs are in compliance before the regulations take effect.