Before the ACA, under the HIPAA wellness rules, an employer could offer financial incentives of up to 20% of the cost of health plan coverage to participate in health-contingent wellness programs. Beginning in 2014, the 20% cap was increased to 30% with an additional 20% available to reward compliance with tobacco use cessation programs (for a grand total of 50% for compliant tobacco programs).
No. An employer is not required to offer financial incentives to participate in wellness programs. However, more and more are choosing to do so. The ACA’s wellness regulations plan sponsors with increased flexibility to design wellness incentives, but employers should bear in mind that other federal laws such as the Genetic Information Nondiscrimination Act (GINA) and Americans with Disabilities Act (ADA) may limit certain wellness plan designs.
Neither American Fidelity Assurance Company nor American Fidelity Administrative Services provides tax or legal advice and, given the complexity of these laws, we always recommend working with your legal counsel on how the laws impact your specific situation.
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