March 11, 2008

Compliance Checklist for Wellness Programs

The DOL has issued a helpful tool, in the form ofField Assistance Bulletin 2008-02, for determining whether a wellness program is subject to the HIPAA nondiscrimination rules. 

A wellness program is subject to the HIPAA nondiscrimination rules if it is a health plan, or part of a health plan; and if the reward for participating in the program is outcome-based. 

If a wellness program is based on health factors, it must meet these 5 standards:

  1. The reward, taken together with all rewards from other wellness programs, cannot exceed 20% of the cost of single coverage, or if the individual has dependent coverage, the cost of the relevant coverage; for example, full family or individual + one.
  2. The program must be reasonably designed to promote health or prevent disease, and cannot be overly burdensome.  The program cannot be designed in a way that would cause it to be suspect, or be a subterfuge to evade the purposes of the law.
  3. The program must give individuals the ability to qualify for the program, at least once annually.
  4. The program must be available to all individuals with alternative methods of compliance made available for those who cannot comply because of health reasons.  The regulations do allow a plan to request proof of the inability to comply.
  5. In any plan material that describes wellness programs, the availability of alternative standards must be described.

Certain wellness programs are considered to satisfy the nondiscrimination rules without having to meet the five standards above, as long as they are available to all similarly situated individuals.


The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations.

As required by U.S. Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained in this Benefit Beat is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service.

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