Many MedBen clients who offer the compliance-based WellLiving program also incorporate outcome-based incentives for smoking cessation, BMI, and other health standards. The Departments of Labor, Health and Human Services, and the Treasury recently issued new guidance on when employees can start earning rewards under these incentive programs.
An outcomes-based program must offer a reasonable alternative standard so employees who miss the initial health target can still earn the reward. Earlier guidance left open whether midyear completion of the alternative should make the reward retroactive to the start of the plan year.
Until further guidance is issued, federal agencies will not take enforcement action when a plan provides the reward only for the period after the employee meets the alternative standard. To qualify for this relief, the plan must give employees enough time to complete the alternative and receive the reward, and it must meet other applicable wellness program requirements.
Plans must also notify employees about the alternative in materials describing the health-contingent program and in notices that an employee missed an initial target. The notice must explain whom to contact and state that the employee’s doctor’s recommendations will be accommodated. A general mention that the program is available does not require this notice.
The MedBen Compliance team has created a more detailed explanation of wellness program reward requirements, which clients can request from their Account Management team. Questions? Contact Director of Compliance & Human Resources Erin Kelly.