All employers want their employees to be healthy and ready for work, so encouraging employees to undergo annual physicals, quit smoking, or exercise more makes sense for many employers. The Affordable Care Act (ACA) has created new incentives for wellness programs that benefit both employers and their employees. Wellness programs are growing increasingly popular among employers, and about half of United States employers now use them to promote healthful habits for their employees, according to a 2013 employer survey sponsored by the Department of Labor and the Department of Health and Human Services.

The Departments of Health and Human Services, Labor, and the Treasury have jointly released proposed rules on wellness programs to reflect the changes to existing wellness provisions made by the Affordable Care Act and to encourage appropriately designed, consumer-protective wellness programs in group health coverage. These proposed rules are effective for plan years starting on or after January 1, 2014.

The proposed rules continue to support workplace wellness programs, including “participatory wellness programs,” which are generally available without regard to an individual’s health status. These include programs that reimburse for the cost of membership in a fitness center; that provide a reward for employees for attending a monthly, no-cost health education seminar; or that reward employees who complete a health risk assessment without requiring them to take further action.

The rules also outline amended standards for nondiscriminatory “health-contingent wellness programs,” which generally require individuals to meet a specific standard related to their health to obtain a reward. Examples of health-contingent wellness programs include programs that provide a reward to those who do not use, or decrease their use of, tobacco, or programs that provide to those who achieve a specified cholesterol level or weight as well as to those who fail to meet that biometric target but take additional required actions.

So why should you start one of these wellness programs in your workplace?

1. Wellness programs can improve employee health. According to a 2012 Kaiser and Health Research & Educational Trust (HRET) study, 73 percent of responding employers stated that wellness programs improved employee health.
2. Your employees can receive higher rewards for participating in a wellness program than ever before. The maximum permissible reward for health-contingent wellness programs recently increased from 20 percent to 30 percent of the cost of health coverage. Programs to reduce or eliminate smoking may now offer rewards of as much as 50 percent.
3. Wellness programs can save your company money. In the Kaiser/HRET study, 51 percent of smaller firms (fewer than 200 employees) reported cost savings, while 68 percent of larger firms reported savings. In addition, 40 percent of respondents o a survey by Beck Consultants indicated that they had measured the impact of their wellness program on the growth trend of their health care costs, and of these, 45 percent reported a reduction in that growth trend.

Employers, keep your employees fully informed of their rights and obligations under the ACA by procuring and posting Personnel Concepts' All-On-One ACA Information Center Poster.