DOL eases enforcement of workplace wellness program rules

On August 26, the U.S. Department of Labor (DOL) and two other federal agencies issued new guidance on workplace wellness programs following a wave of lawsuits challenging tobacco-related health insurance surcharges.

The guidance, released by the DOL’s Employee Benefits Security Administration along with the Departments of Health and Human Services and the Treasury, addressed questions raised in dozens of lawsuits involving health plan premiums that are higher for employees who use tobacco products.

Federal law allows employers to offer wellness programs that encourage healthy behaviors. Under the Health Insurance Portability and Accountability Act and the Affordable Care Act, employers may provide rewards or incentives to employees who participate in programs focused on areas such as:

• Nutrition,
• Weight management,
• Smoking cessation,
• Fitness,
• Stress management,
• Substance abuse treatment, and
• General health education.

The new guidance focuses on health-contingent wellness programs, which provide rewards only when employees meet certain health-related standards. For example, employees may receive a premium discount if they stop using tobacco products or complete a smoking cessation program.

Federal agencies said that, until additional regulations or guidance are issued, they won’t take enforcement action against health plans that provide wellness rewards only after an employee completes an approved alternative standard, rather than applying the reward retroactively to the beginning of the plan year. In other words, employers may generally begin providing the reward from the date the employee satisfies the alternative requirement.

The guidance also clarifies disclosure requirements for employers and insurance companies. If plan materials simply inform employees that a wellness program exists without explaining the program's details, employers aren’t required to include information about alternative ways employees may qualify for rewards.

Daniel Aronowitz, Assistant Secretary for Employee Benefits Security, said in a press release that the guidance is intended to support employers that use wellness programs to improve health outcomes among workers.

“Wellness programs can play an important role in encouraging healthier behaviors and improving overall health,” Aronowitz said. He added that employers and insurers that offer wellness programs designed reasonably and without discrimination won’t face penalties for using incentives to motivate healthier choices.

The guidance is expected to give employers greater clarity as they continue offering wellness initiatives, including tobacco cessation programs, while legal challenges over premium surcharges continue to work their way through the courts.

Key to remember: The federal government recently issued wellness-program guidance that’s focused on a reasonable alternative standard and disclosure requirements.