WELLNESS PROGRAM CHECKLIST
Use the following questions to help determine whether the plan offers a program of health promotion or disease prevention that is required to comply with the Department’s final wellness program regulations and, if so, whether the program is in compliance with the regulations.
A. Insert the first day of the current plan year: _______________________________.
Is the date after July 1, 2007? …………………………………………………………… Yes No
The wellness program final rules are applicable for plan years beginning on or after July 1, 2007.
B. Does the plan have a wellness program? …………………………………………… Yes No
A wide range of wellness programs exist to promote health and prevent disease. However, these programs are not always labeled “wellness programs.” Examples include: a program that reduces individual’s cost-sharing for complying with a preventive care plan; a diagnostic testing program for health problems; and rewards for attending educational classes, following healthy lifestyle recommendations, or meeting certain biometric targets (such as weight, cholesterol, nicotine use, or blood pressure targets).
TIP: Ignore the labels – wellness programs can be called many things. Other common names include: disease management programs, smoking cessation programs, and case management programs.
C. Is the wellness program part of a group health plan?………………………… Yes No
The wellness program is only subject to Part 7 of ERISA if it is part of a group health plan. If the employer operates the wellness program as an employment policy separate from the group health plan, the program may be covered by other laws, but it is not subject to the group health plan rules discussed here.
Example: An employer institutes a policy that any employee who smokes will be fired. Here, the plan is not acting, so the wellness program rules do not apply. (But see 29 CFR 2590.702, which clarifies that compliance with the HIPAA nondiscrimination rules, including the wellness program rules, is not determinative of compliance with any other provision of ERISA or any other State or Federal law, such as the Americans with Disabilities Act.)
D. Does the program discriminate based on a health factor?………………….. Yes No
A plan discriminates based on a health factor if it requires an individual to meet a standard related to a health factor in order to obtain a reward. A reward can be in the form of a discount or rebate of a premium or contribution, a waiver of all or part of a cost-sharing mechanism (such as deductibles, copayments, or coinsurance), the absence of a surcharge, or the value of a benefit that would otherwise not be provided under the plan.
Example 1: Plan participants who have a cholesterol level under 200 will receive a premium reduction of 20%. In this Example 1, the plan requires individuals to meet a standard related to a health factor in order to obtain a reward.
Example 2: A plan requires all eligible employees to complete a health risk assessment to enroll in the plan. Employee answers are fed into a computer that identifies risk factors and sends educational information to the employee’s home address. In this Example 2, the requirement to complete the assessment does not, itself, discriminate based on a health factor. However, if the plan used individuals’ specific health information to discriminate in individual eligibility, benefits, or premiums, there would be discrimination based on a health factor.
If you answered “No” to ANY of the above questions, STOP. The plan does not maintain a program subject to the group health plan wellness program rules.
E. If the program discriminates based on a health factor, is the program saved by the benign discrimination provisions?…………………………………………………….. Yes No
The Department’s regulations at 29 CFR 2590.702(g) permit discrimination in favor of an individual based on a health factor.
Example: Plan grants participants who have diabetes a waiver of the plan’s annual deductible if they enroll in a disease management program that consists of attending educational classes and following their doctor’s recommendations regarding exercise and medication. This is benign discrimination because the program is offering a reward to individuals based on an adverse health factor.
TIP: The benign discrimination exception is NOT available if the plan asks diabetics to meet a standard related to a health factor (such as maintaining a certain BMI) in order to get a reward. In this case, an intervening discrimination is introduced and the plan cannot rely solely on the benign discrimination exception.
If you answered “Yes” to the previous question, STOP. There are no violations of the wellness program rules.
If you answered “No” to the previous question, the wellness program must meet the following 5 criteria.
F. Compliance Criteria
(1) Is the amount of the reward offered under the plan limited to 20% of the applicable cost of coverage? (29 CFR 2590.702(f)(2)(i))…………… Yes No
Keep in mind these considerations when analyzing the reward amount:
Who is eligible to participate in the wellness program?
If only employees are eligible to participate, the amount of the reward must not exceed 20% of the cost of employee-only coverage under the plan. If employees and any class of dependents are eligible to participate, the reward must not exceed 20% of the cost of coverage in which an employee and any dependents are enrolled.
Does the plan have more than one wellness program?
The 20% limitation on the amount of the reward applies to all of a plan’s wellness programs that require individuals to meet a standard related to a health factor.
Example: If the plan has two wellness programs with standards related to a health factor, a 20% reward for meeting a body mass index target and a 10% reward for meeting a cholesterol target, it must decrease the total reward available from 30% to 20%. However, if instead, the program offered a 10% reward for meeting a body mass index target, a 10% reward for meeting a cholesterol target, and a 10% reward for completing a health risk assessment (regardless of any individual’s specific health information), the rewards do not need to be adjusted because the 10% reward for completing the health risk assessment does not require individuals to meet a standard related to a health factor.
(2) Is the plan reasonably designed to promote health or prevent disease? (29 CFR 2590.702(f)(2)(ii)) …………………………………………………….. Yes No
The program must be reasonably designed to promote health or prevent disease. The program should have a reasonable chance of improving the health of or preventing disease in participating individuals, not be overly burdensome, not be a subterfuge for discriminating based on a health factor, and not be highly suspect in the method chosen to promote health or prevent disease.
(3) Are individuals who are eligible to participate given a chance to qualify at least once per year? (29 CFR 2590.702(f)(2)(iii)) …………………….. Yes No
(4) Is the reward available to all similarly situated individuals? Does the program offer a reasonable alternative standard? (29 CFR 2590.702(f)(2)(iv)) ……………………………. Yes No
The wellness program rules require that the reward be available to all similarly situated individuals. A component of meeting this criterion is that the program must have a reasonable alternative standard (or waiver of the otherwise applicable standard) for obtaining the reward for any individual for whom, for that period:
o It is unreasonably difficult due to a medical condition to satisfy the otherwise applicable standard; OR
o It is medically inadvisable to attempt to satisfy the otherwise applicable standard.
It is permissible for the plan or issuer to seek verification, such as a statement from the individual’s physician, that a health factor makes it unreasonably difficult or medically inadvisable for the individual to satisfy or attempt to satisfy the otherwise applicable standard.
(5) Does the plan disclose the availability of a reasonable alternative in all plan materials describing the program? (29 CFR 2590.702(f)(2)(v)) …………………………… Yes No
The plan or issuer must disclose the availability of a reasonable alternative standard in all plan materials describing the program. If plan materials merely mention that the program is available, without describing its terms, this disclosure is not required.
TIP: The disclosure does not have to say what the reasonable alternative standard is in advance. The plan can individually tailor the standard for each individual, on a case-by-case basis.
The following sample language can be used to satisfy this requirement: “If it is unreasonably difficult due to a medical condition for you to achieve the standards for the reward under this program, call us at [insert telephone number] and we will work with you to develop another way to qualify for the reward.”
If you answered “Yes” to ALL of the 5 questions on wellness program criteria, there are no violations of the HIPAA wellness program rules.
If you answered “No” to any of the 5 questions on wellness program criteria, the plan has a wellness program compliance issue. Specifically,
Violation of the general benefit discrimination rule (29 CFR 2590.702(b)(2)(i)) – If the wellness program varies benefits, including cost-sharing mechanisms (such as deductible, copayment, or coinsurance) based on whether an individual meets a standard related to a health factor and the program does not satisfy the requirements of 29 CFR 2590.702(f), the plan is impermissibly discriminating in benefits based on a health factor. The wellness program exception at 29 CFR 2590.702(b)(2)(ii) is not satisfied and the plan is in violation of 29 CFR 2590.702(b)(2)(i).
Violation of general premium discrimination rule (29 CFR 2590.702(c)(1)) – If the wellness program varies the amount of premium or contribution it requires similarly situated individuals to pay based on whether an individual meets a standard related to a health factor and the program does not satisfy the requirements of 29 CFR 2590.702(f), the plan is impermissibly discriminating in premiums based on a health factor. The wellness program exception at 29 CFR 2590.702(c)(3) is not satisfied and the plan is in violation of 29 CFR 2590.702(c)(1).
Additional compliance information regarding the other provisions in Part 7 of ERISA, including the HIPAA portability provisions and the rest of the HIPAA nondiscrimination provisions, is available on the Department’s website at: http://www.dol.gov/ebsa/pdf/CAGAppA.pdf.
Questions concerning the information contained in this Bulletin may be directed to the Office of Health Plan Standards and Compliance Assistance at 202-693-8335.
Employee Health, Wellness– No Longer Optional Benefit, but Strategic Imperative
When you develop and implement work+life flexibility strategies that help businesses operate and individuals manage their work+life fit, you run into many often baffling false beliefs. Since the start of the recession, two of these off-base convictions have stood out as managers and employees struggle to do more with less:
- Individuals think their health and wellness are “optional” parts of their work+life fit, and
- Line business leaders don’t connect how employee health and well being directly impact the optimal, effective functioning of their workplace, and they don’t understand (or don’t want to deal with) the role that they play to ensure employees are as healthy as possible.
Families and Work Institute (FWI) just released The State of Health in the American Workforce study. The numbers are not only disturbing, but they are a real call to action for both individuals and employers. The research shines a light on the paradox that working harder, faster, longer does more harm than good not only to our personal health and well being, but to business. In the new work+life flex normal, employee health and wellness are not an “option,” they’re a strategic imperative.
Here are some highlights (to read the full report which is “the only study of its kind to provide 30+ year comparisons of life on and off the job,” go to the Families and Work Institute website):
Employee Health and Wellness Are Suffering:
- Less than one third of employees (28%) today say their overall health is “excellent”—a significant decline of 6% from 2002.
- 41% of employees report experiencing three or more indicators of stress sometimes, often or very often, which is a significant increase from 2002.
- Work-life conflict increasing, especially for men.
- One in three employees experiences one or more symptoms of clinical depression.
- 49% of employees have not engaged in regular physical exercise in the last 30 days.
- One in four smokes.
- While little changed since 2002, 27% of employees still experience some kind of sleep problem that affected their job performance within the last month at least sometimes.
- Nearly two out of three employed individuals (62%) are overweight or obese.
- 8% of employees have no health insurance from any source, with low-wage/low-income employees less likely to have access and least likely to use even if they do have access.
Why Does it Matter? Direct Impact on Business
There are two employees, A and B. Employee A reports low levels of personal overall health and wellness, and B reports high levels. Common sense would say that a manager gets more from employee B in terms of extra effort, satisfaction and commitment. But the FWI research shows how significant this correlation between health and business impact really is: “Employees’ physical and mental health, stress levels, sleep quality and energy levels all significantly impact important work outcomes of interest to employers, such as engagement, turnover intent and job satisfaction.” Here’s my best attempt to present the study findings visually:
In other words, employee health and wellness isn’t just a nice perk, or program to offer when times are good. Employee health and wellness are mission critical to an organization’s operating success, especially in this difficult time when everyone needs to bring the best of themselves to the table everyday.
A couple of specific findings to note:
- Hopefully, this research will be another nail in the coffin that work+life fit is a “women’s issue” only. It is an “everyone” issue. Work-life conflict increased more significantly for men than women from 2002 to 2008. You might be surprised, but men said they are more positively affected by having economic security in their jobs and a good fit between their work and personal lives. Whereas, women are more positively affected by being challenged in their jobs and by having autonomy.
- FWI joins WLF in using the term work-life “fit” in their research. Hopefully, this affirmation of the concept of work-life “fit” will move us away from the limiting and inaccurate concept of “balance” to describe optimizing the unique way an individual’s work and life fit together. Also noteworthy is the fact that work+life fit is the workplace effectiveness factor that directly affects the most aspects of employee health and wellness in the FWI study.
What Can Managers/Employers Do?
How should a manager or employer respond to the findings especially in turbulent times when resources are tight, and there’s constant pressure to perform financially? Too often when business leaders think of “health and wellness,” they go immediately to perks like an on-site gym and EAP. But, as outlined in the visual model of the findings above, the interventions that lead to “excellent employee health and wellness,” and, in turn engagement, retention and satisfaction, are broader. Some are benefits like health insurance, paid vacation and sick days that cost money, and others are behaviors and ways of operating the business that cost nothing. Regardless, any money or effort expended is an investment that will have a return.
The FWI report offers insightful implications for businesses,especially around the difficult task of addressing economic security in these tough times, but I would add:
- Make work+life flexibility, or flexibility in how, when and where work is done and life is managed, part of the way your organization operates and not just a program, perk or benefit. It will go a long way to achieve many of the behaviors and workplace effectiveness factors outlined in the report that affect health and wellness.
- It’s not enough to offer stress management or weight loss classes, reimburse gym memberships and provide information about healthy eating. You need to give and encourage time for people to use the gym, shop for healthy food and go to weight loss class without feeling badly. (Check out Cindy Goodman’s excellent post on the FWI research and how one Florida business owner make weight loss and health a mission in her company).
- Be a role model and clarify expectations. People are very, very scared right now. They are terrified to do anything that jeopardizes their job. Managers must role model the desired behavior if employees are to feel comfortable– take vacation, and sick days, talk about going to the gym, eating healthfully and getting rest. Things you should be doing anyway, and might have let fall to the wayside over the past few months.
What Can You as an Employee Do?
Much more than you think. Yes, many of us are scared but really that is no excuse. Doing as much as you can to be healthy and able to contribute extra effort and commitment on the job is no longer optional. In fact, it’s imperative for your job security. Again, paradoxically, you may think working harder, faster and longer will reduce the risk of losing your job. But the research shows that if that overwork make you unhealthy it’s having the opposite impact. You aren’t as engaged, committed or satisfied, which could make you more vulnerable when employment decisions are made.
Where to begin? When I run my corporate work+life fit seminars we always end with an exercise called “One Small Thing.” Small changes in your work+life are very powerful especially as they relate to health and wellness. Here are common examples of small health and wellness changes employees have committed to making over the years:
- Go to bed an hour earlier and get up earlier to work out two days a week.
- Put my gym clothes in my car and go right to the gym before going home.
- Make a list of meals for the week and shop over the weekend so there is food in the house.
- Turn off the TV an hour before a go to bed and wind down.
- Start meditating for 30 minutes every morning.
- Keep a journal every night before I go to bed.
- Make a date with my best friend to go to the movies once a month.
Your employer can do its part to create a culture and workplace that supports employee health and wellness, but in the end, it’s you doing it. This is particularly true when it comes to financial security, one of the workplace effectiveness factors influencing health and well being. While not part of the study, I wonder how much of this increased stress relates to the fact that “three out of five workers” live paycheck to paycheck according to a recent CareerBuilder survey. Better personal financial choices could mitigate some of the stress related uncertainty in employment and earnings.
Finally, during the call to announce the research results, FWI President, Ellen Galinsky, summed it up by saying, “In the U.S. we see work as a sprinting marathon. Instead we need to think about it more in terms of weightlifting. In between periods of exertion, there’s rest and recovery. This gives you the strength to exert your best effort the next time.” I agree. Hopefully this research will challenge the false beliefs that employee health and wellness are “optional” and break us out of our sprinting marathon that is no longer working—if it ever really did.
Thanks to Cali Williams Yost