So, now you know what the rules are for corporate wellness programs, and the impact that they’re likely to have. The only thing left to ask is, “What makes a wellness program legal under these rules?”
Fortunately, the third part of the OFR document details several examples of wellness programs and gives the reasons for their legality or illegality. Let’s take a look at each one.
Example 1 — Walking Program
A company and its group health plan offer a walking program as an activity-only wellness program. Those who can’t take part due to a medical condition will waive the requirement and prove the reward. All materials describing the program’s terms disclose the waiver availability.
Is the program legal? Yes, because it is:
- reasonably designed to promote health and prevent disease (walking is great for one’s health),
- available to all similarly situated individuals,
- accommodates people for whom it’s unreasonably difficult to participate (or medically inadvisable to try) by giving them the reward, and
- complies with the disclosure provision.
Example 2 — Cholesterol Screening
A company and its group health plan offer a cholesterol screening as part of an outcomes-based wellness program. The reward is given to those whose cholesterol counts are under 200 on a total cholesterol test. For those whose total cholesterol is 200 or higher, the plan allows individuals to develop an alternative plan to reduce their cholesterol with their personal physicians. Physicians are allowed to modify the standards over the year as needed (for instance, if the employee has some medical emergence like surgery or depression).
Plan materials describing the terms of the program include statements that describe the primary standard (cholesterol under 200), the alternative standard (working with employee and physician to develop an action plan), and the fact that meeting either of these standards qualifies employees for the reward.
Is the program legal? Yes, because:
- the initial standard involves meeting a specific health criterion to get the reward,
- the program is reasonably designed to promote health and prevent disease*,
- the alternative standard is available to all participants who don’t meet the initial standard, and
- the disclosure provision is satisfied.
* Total cholesterol is actually a poor standard for measuring heart health in most circumstances. I’d prefer something different, like employing cholesterol ratios, LDL particle number, and/or LDL particle density.
The next example is exactly the same as this one, but does not allow an opportunity for the employee’s personal physician to design an action plan. Instead, the alternative standards are created by the wellness program’s physician. That creates an illegal wellness program due to its failure to accommodate the recommendations of an employee’s personal physician where medical appropriateness is concerned. As a result, it doesn’t meet the criteria for reasonable design or availability to all similarly situated individuals.
Now, let’s say this illegal program adds a wrinkle. Say that employees’ personal physicians can take a look at the plan created by wellness program’s physician. If the program’s plan doesn’t meet the personal physician’s approval (let’s say it’s medically inappropriate for that employee), and the wellness program allows the personal physician to change the plan, then the program is legal.
Example 3 — BMI screening with walking program alternative
The wellness program gives a reward to those who have a BMI of 26 or lower. They do this measurement shortly before the start of the year. Anyone who doesn’t meet the BMI target gets the same discount if they comply with a walking program that requires walking for 150 minutes a week. (This meets current recommendations for physical activity, which say 30 minutes of activity on most days of the week is conducive to good health.)
Anyone who finds this program unreasonably difficult (medical condition prevents or makes it inadvisable to try) can get the discount by meeting an alternative standard that is well-designed, not unreasonably burdensome or impractical, and takes into account the individual’s medical situation.
All plan materials make it known that if the BMI target isn’t met, employees can take part in the walking program, and if an employee’s doctor says that the walking program isn’t right for him/her, the plan will work with them to create an appropriate alternative.
This is legal because it fulfills all the requirements for an outcome-based program. It’s reasonably designed to promote health and prevent disease. It provides a reasonable alternative standard that includes personal physician recommendations. The walking program is an activity-only wellness program in its own right, and satisfies the requirements for that program by giving a reasonable alternative standard to the primary 150 minutes per week standard. Full disclosure is also given.
Example 4 — BMI screening with alternatives
This example has the same BMI target as Example 3, but instead of the walking program, the alternative standard is for the employee to drop his/her BMI by one point. At any given point during the year, the employee can request a reasonable alternative by working with his/her physician to design a diet, exercise, and weight-focused program. The physician is allowed to alter the plan at any time, so long as the details remain reasonable.
Assuming all else is equal to Example 3 (like full disclosure), this is a legal program.
Example 5 — Tobacco use surcharge with smoking cessation program
Through the use of an HRA, premium differentials are given based on tobacco use. The plan’s literature states that if an employee smokes, he/she can participate in a smoking cessation program. If the program is completed, the surcharge is waived.
Some details about the smoking cessation program: it doesn’t require an exorbitant time commitment. The health plan pays for the cost of attending the program. The surcharge is waived if the program is completed regardless of whether the employee stops smoking, but the employee can be required to take the program again. Personal physicians can get involved in designing alternative standards.
The program is legal — it meets all five rules of outcome-based wellness programs.
Now, let’s say the program were to require the employee to completely quit smoking. By not providing the reward in later years unless the employee quits for good after taking part in the smoking cessation program, the program becomes illegal. Remember, a plan cannot stop providing a reasonable alternative standard for employees to meet at least once per year. The alternative standard can be the same, or it can be different, but it must be available every year.
I’ve always learned best through applying principles to actual examples, and seeing what works and what doesn’t. I hope these examples help clear some of the muddiness of the regulations. Let me know what you think!