Health Care Reform includes two provisions designed to help employers sponsor wellness programs.

HIPAA Wellness Incentives

Under the HIPAA wellness rules, an employer may currently offer financial incentives to participate in health-contingent wellness programs up to 20% of the cost of health plan coverage.  Beginning in 2014, the 20% cap is increased to 30% with an additional 20% available to reward compliance with tabacco use cessation programs (or a grand total of 50% for those programs).

Small Employer Wellness Grants

Health Care Reform authorizes $200 million to provide grants to small employers to establish “comprehensive workplace wellness programs.”  The grant program is available from 2011 through 2015.  An eligible small employer must employ less than 100 employees who work 25 hours or more per week and must not have provided a workplace wellness program on March 23, 2010. 

A comprehensive workplace wellness program must include the following:

• Health awareness initiatives (including health education, preventive screenings, and health risk assessments);
• Efforts to maximize employee engagement (including mechanisms to encourage employee participation);
• Initiatives to change unhealthy behaviors and lifestyle choices (including counseling, seminars, online programs, and self-help materials); and
• Supportive environment efforts (including workplace policies to encourage healthy lifestyles, healthy eating, increased physical activity, and improved mental health).

HHS is required to develop specific criteria for qualified programs and the application process.

American Fidelity Assurance Company does not provide tax or legal advice.