Builders and Contractors Exchange
Weekly Bulletin: 9 feb 2007
The Internal Revenue Service, The Department of Labor, and The Department of Health and Human Services Release Final Regulations Regarding Wellness Programs
The Internal Revenue Service, the Department of Labor and the Department of Health and Human Services released final regulations on December 13, 2006, concerning employer-sponsored wellness programs. Central to these wellness programs are nondiscrimination requirements which would prevent employer-sponsors from prohibiting participation in the programs by persons who engage in certain activities such as smoking.
The final regulations illustrate the wide range of programs that are available to participants in an effort to increase health awareness. These programs include: 1) A program that reimburses all or part of the cost for memberships in a fitness center; 2) A diagnostic testing program that provides a reward for participating and does not base any part of the reward on health-related outcomes; 3) A program that encourages preventive care through the waiver of the co-payment or deductible requirement under a group health plan for the costs of, for example, prenatal care or well-baby visits; 4) A program that reimburses employees for the costs of smoking cessation programs without regard to whether the employee quits smoking; and, 5) A program that provides a reward to employees for attending a monthly health education seminar.
According to the final regulations, there are five requirements for a program to be considered to be a wellness program. These are: 1) The first requirement limits the maximum allowable reward or total of rewards to a maximum of twenty-percent of the cost of the employee-only coverage under the plan; 2) The second requirement provides that wellness programs must be reasonably designed to promote health or prevent disease; 3) The third requirement is that the program gives individuals eligible for the program the opportunity to qualify for the reward at least once per year; 4) The fourth requirement provides that rewards under wellness programs must be available to all similarly situated individuals; and 5) The fifth requirement provides that plan materials describing wellness program standards disclose the availability of reasonable alternative standards.
Questions?
If you have any questions about this article or any other related matters, please contact:
Robert A. Desilets, Jr.
This article is meant to bring awareness to this topic and is not intended to be used as legal advice.