Lewis & Ellis Inc.

Federal agencies clarify rules for employee wellness programs

Regulatory Agencies
by Rebecca Ewing
Federal agencies clarify rules for employee wellness programs
Federal agencies clarify rules for employee wellness programs

In recent years, a large and growing number of companies nationwide have determined that they may be able to reduce their employee healthcare costs by instituting wellness programs designed to get workers healthier. Now, new regulations for how these initiatives can be run have been released by a number of federal agencies.

In late May, the U.S. Departments of Labor, the Treasury, and Health and Human Services issued final rules for worker wellness programs run by employers. These state that as of the first day of next year - the same date on which the Affordable Care Act's coverage mandate goes into effect - employers can charge as much as 30 percent of premiums for failing to meet wellness goals they establish. That's up significantly from the current allowable level of 10 percent, but comes with the stipulation that in some cases, a "reasonable alternative" to these programs must be provided by the company.

In addition, employees can opt out of these programs, and for the reasonable alternative, for any reason, the report said. In the past, a medical reason was needed in order to not participate, but this is no longer the case. Employee advocacy groups say that this change is a positive for workers, but that there may be unexpected changes as a result of this issue because it remains to be seen just how popular these new programs end up being for workers. Having this added flexibility may prove to be extremely popular, but so too have these wellness programs over the last few years. This means that many Americans who have the option to enroll will be have more choices when approaching their own personal health needs.

Today, about half of companies nationally with more than 200 employees use this type of wellness program, the report said. However, it's important to note that it may not always be easy for studies to show just how effective these initiatives are in improving employee health and morale.

For these reasons, employers will have to consider the ways in which these plans might work for them or, in the case of companies that have already instituted them, how effective they've been. This information will, in turn, likely help to make future decisions - and state or federal regulations - related to healthcare costs in general easier to follow.



Consultants to Contact