As an employer, it’s important to offer wellness programs that meet two qualifications: Employees should want to participate in them, and all members of your workforce need to have an equal opportunity to get involved. While you’re free to offer a variety of programs, keep in mind that there may be employees physically unable to take part in certain activities. The best practice here is to provide alternatives for any employees with limitations.
The Affordable Care Act encourages employers to offer wellness programs alongside standard benefits packages. The purpose of these programs is to provide employees with more control over their own health. By including certain incentives to improve and maintain individual health, employers may see improvements in a variety of areas, including:
- Increased workplace productivity.
- Significant reduction in sick days and lost work time.
- Reduced doctor/health care visits.
While employer-based wellness programs are encouraged, the ACA features applicable rules if you include incentives. There are two types of incentive programs a business owner can offer to employees:
- Workplace wellness programs are provided with a benefits package and are typically offered regardless of employees’ health status. In these programs, employers reimburse employees for the cost of a gym membership, completing a health risk assessment or attending free wellness seminars.
- Nondiscriminatory health-contingent programsrequire employees to meet specific health-related standards in order to receive a reward. Some provide rewards for decreasing, eliminating or simply not using tobacco products, while others are based on maintaining or achieving healthy cholesterol levels or weight goals, among other measures.
All programs offered in addition to your current benefits packages, regardless of type, must meet ACA standards and be intended to either promote employee health or prevent disease.
Building upon the initial ACA requirements for these programs, the U.S. Departments of Labor, Health and Human Services and the Treasury implemented additional rules to protect employers and employees. Let’s run through some of the big ones.
Opportunity for Participation
All employees must have an opportunity to participate in the program, or a similar program, to earn the relevant incentive. If existing medical conditions prevent an employee from participating, it’s now required that those employees are provided a way to qualify alternatively for any offered rewards or incentives.
For example, some businesses promote on-site blood drives that offer employees paid time off (PTO) to participate, as well as PTO for the friends and family they recruit. Because there are certain medical conditions or religious beliefs that may prohibit people from donating blood, affected employees have the opportunity to earn PTO by working as a recruitment volunteer or assisting in the drive’s administrative aspects.
All employees must have fair notice of any opportunity to participate in a program or qualify for an incentive. If there’s any medical or health issue preventing participation, ample notice allows the employee to work with the company to find an alternative way to participate.
The latest government rules allow for an increase in the maximum reward a business can give through a health-contingent program: 30 percent of the cost of the company’s offered health coverage for general incentives and up to 50 percent for programs designed to cut tobacco use.
By enhancing your existing benefits package with incentive-based wellness programs, you encourage employees to take an added interest in their health and well-being, leading to reduced overall costs associated with medical care and prescription drugs. Just make sure you’re following the ACA and government rules — especially when it comes to fostering participation for your entire workforce.
This content is provided solely for informational purposes. It is not intended as and does not constitute legal advice. The information contained herein should not be relied upon or used as a substitute for consultation with legal, accounting, tax and/or other professional advisers.
Allison Hutton is an experienced writer, editor, communications professional, researcher and social media consultant. During her more than 15 years of communications and writing experience, Allison has worked with a variety of clients, from small-business owners to Fortune 500 companies. She has an M.S. in entertainment business, a B.A. in communication and lives in Pittsburgh, Pennsylvania, with her husband and four children.