More of the provisions of the Affordable Care Act (ACA) have been officially implemented this year, and organizations still have many questions as to which rules and regulations apply to them. With wellness programs becoming more common, some wonder if they are governed by the ACA (and if so, what they need to train for). Know the facts in order to comply.
Does your organization need to provide an employee wellness plan? If you do, what are the requirements and restrictions? Let’s take a look at the wellness program provisions of the ACA and see what employers should consider.
Must You Provide an Employee Wellness Program Under the ACA?
First things first—are you required to provide an employee wellness program? The short answer is no; there’s no legal requirement to implement such a program under the ACA. But if you do opt to create or continue an employee wellness program, and it’s not part of a grandfathered plan, it should meet or exceed the wellness program guidelines established in the ACA.
There are many benefits to employee wellness programs, and one of the primary benefits is a potential reduction in healthcare costs for both the employee and the employer. This reason alone is why many wellness programs got started. Such initiatives can also improve overall employee health levels, thus reducing absences and increasing productivity—not to mention improving morale and retention—all of which are worthy goals.
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Types of Wellness Programs
There are two general types of employee wellness programs defined in the ACA:
- Participatory programs. This type of program simply gives employees the opportunity to participate in some type of wellness-related activity, event, or benefit. There are no requirements for employees in terms of health improvements, no minimum health requirements to join, and no required outcomes after participation. Here are some examples of participatory programs:
- Health-related training seminars,
- Health screenings, and/or
- Activities, such as a walking group.
The key here is that the participation and/or benefit gained must not be dependent on achieving a specific health-related outcome or qualification. Any reward or benefit must be based solely on participation, and it must be open to anyone to participate.
- Health-contingent programs. These types of programs, on the other hand, are contingent on achieving some type of health goal, and typically a benefit is derived after achieving that goal. For example, an employer could implement a program that rewards achieving a healthier body mass index (BMI) or maintaining an already healthy BMI level. This is just one example of a health-related outcome that some employers may opt to reward, for example, through a reduction in health insurance costs.
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Wellness Program Regulations Under the ACA
Generally speaking, the rules outlined under the ACA are meant to ensure employee wellness programs are run in a nondiscriminatory way while encouraging better health outcomes. This goal applies to both types of employee wellness programs.
For either type of program, the employer must still comply with all applicable laws, including the Health Insurance Portability and Accountability Act (HIPAA), the Genetic Information Nondiscrimination Act (GINA), the Americans with Disabilities Act (ADA), the Family and Medical Leave Act (FMLA), and the Employee Retirement Income Security Act (ERISA).
However, there are some additional rules employers should keep in mind. We’ll go over more on these specific ACA regulations in tomorrow’s Advisor.