General News

Wellness Programs

General News|Aug 01, 2019

Wellness programs are generally health promotion and disease prevention programs and activities offered to employees as part of an employer-sponsored group health plan. There are three main types of wellness programs:   

  • Participatory wellness programs, which are generally available without regard to an individual’s health status and do not offer any reward based on satisfying a health-related standard.
  • Activity-only wellness programs, which require an individual to perform or complete a health-related activity to obtain a reward.
  • Outcome-based wellness programs, which require an individual to attain or maintain a specific health outcome in order to obtain a reward.

Wellness programs are subject to certain federal requirements. General compliance information for these different types of wellness programs appears below.

Participatory Wellness Programs

Participatory wellness programs offered as part of a group health plan generally must:

  1. Be made available to all “similarly situated individuals.” However, the following employees can be treated as different groups of similarly situated individuals: part-time and full-time employees, employees working in different geographic locations, and employees with different dates of hire or lengths of service.
  2. Not bar individuals from participating based on a health factor, including disability.
  3. In accordance with HIPAA, generally protect from disclosure any individually identifiable health information collected from or created about participants in the program. Click here for more information.
  4. If sponsored by an employer with 15 or more employees, offer reasonable accommodations that allow employees with disabilities to participate.
  5. If collecting employee health information and sponsored by an employer with 15 or more employees, distribute an ADA Notice Regarding Wellness Program to all individuals eligible to participate. Click here for a sample ADA Notice Regarding Wellness Program.
  6. If sponsored by an employer with 15 or more employees, ensure that the employer does not receive any information about program participants except where necessary for plan administration.

Activity-Only Wellness Programs

Activity-only wellness programs offered as part of a group health plan generally must:

  1. Not bar individuals from participating based on a health factor, including disability.
  2. Allow participants to obtain a reward at least once per year, and generally limit such rewards to 30% of the cost of coverage under the health plan for the employee and his or her dependents.
  3. Offer a reasonable alternative standard to individuals who, due to a medical condition, are unable to satisfy the standard necessary to obtain the reward.
  4. In accordance with HIPAA, generally protect from disclosure any individually identifiable health information collected from or created about participants in the wellness program. Click here for more information.
  5. If sponsored by an employer with 15 or more employees, offer reasonable accommodations that allow employees with disabilities to participate.
  6. If collecting employee health information and sponsored by an employer with 15 or more employees, distribute an ADA Notice Regarding Wellness Program to all individuals eligible to participate. Click here for a sample ADA Notice Regarding Wellness Program.
  7. If sponsored by an employer with 15 or more employees, ensure that the employer does not receive any information about program participants except where necessary for plan administration.

Outcome-Based Wellness Programs

Outcome-based wellness programs offered as part of a group health plan generally must:

  1. Not bar individuals from participating based on a health factor, including disability.
  2. Allow participants to obtain a reward at least once per year, and generally limit such rewards to 30% of the cost of coverage under the health plan for the employee and his or her dependents.
  3. Offer a reasonable alternative standard to individuals who do not meet the program’s initial standard based on a measurement, test, or screening.
  4. Distribute a Wellness Program Disclosure in all plan materials that describe the program. This notice must also be furnished to any individual that fails to satisfy an outcome-based standard necessary to obtain a reward. Click here to download a model Wellness Program Disclosure.
  5. In accordance with HIPAA, generally protect from disclosure any individually identifiable health information collected from or created about participants in the wellness program. Click here for more information.
  6. If collecting employee health information and sponsored by an employer with 15 or more employees, distribute an ADA Notice Regarding Wellness Program to all individuals eligible to participate. Click here for a sample ADA Notice Regarding Wellness Program.
  7. If sponsored by an employer with 15 or more employees, offer reasonable accommodations that allow employees with disabilities to participate.
  8. If sponsored by an employer with 15 or more employees, ensure that the employer does not receive any information about program participants except where necessary for plan administration.

Additional requirements and exceptions may apply to your wellness program. For more information, click here.

Published by

Jessica Cheney

Jessica Cheney

Jessica Cheney is the Vice President of Benefits for Arcwood Consulting. She is responsible for overseeing all aspects of our clients from quoting, onboarding, renewal, compliance and ensuring we are meeting and exceeding our client and company goals. Her vast knowledge of the industry and employers allows her to oversee the processes and ensure our clients’ needs are met. Jessica began her career in 1993 at BlueCross and BlueShield of Arizona and then joined Black Gould and Associates, a large general agency where she worked with carriers, agents and clients implementing and servicing large employers. Jessica joined Arcwood in 2005. In addition to holding her Accident/Health and Life Producer license she has the REBC (Registered Employee Benefits Consultant) designation and certifications in HIPAA (Privacy and Security), Benefits Account Management, Patient Protection and Affordable Care Act (PPACA), Self-Funding, Voluntary Worksite and Wellness. Jessica also serves as President on the board of the Greater Phoenix Association of Health Underwriters (GPAHU). Personally, Jessica, being an Arizona native enjoys outdoor activities such as hiking, biking, camping and attending sporting events with her family.