The Departments of Health and Human Services, Labor, and Treasury (The Departments) have issued final wellness program rules. The new final rules are based on the existing HIPAA wellness rules and the requirements contained in proposed rules issued in November 2012.     

Wellness programs are divided into two categories:  

• participatory wellness programs, and
• health-contingent wellness programs 

Participatory wellness programs are permissible under the HIPAA nondiscrimination rules, as amended by the Affordable Care Act (ACA), provided they are available to all similarly situated individuals regardless of health status.  

Health-contingent wellness programs are permissible under the rules provided they meet the five specific criteria described below.

These final regulations regarding wellness plans generally apply for plan years beginning on or after January 1, 2014.  

Participatory Wellness Programs
Participatory wellness programs are defined as "programs that either do not provide a reward or do not include any conditions for obtaining a reward that are based on an individual satisfying a standard that is related to a health factor."  The rules do not impose a limit on incentives or rewards for participatory programs.

Examples described in the guidance include:  

1. a program that reimburses employees for all or part of the cost of membership in a fitness center;
2. a diagnostic testing program that provides a reward for participation and does not base any part of the reward on outcomes; and
3. a program that provides a reward to employees for attending a monthly, no-cost health education seminar.

Health-Contingent Wellness Programs
Health-contingent wellness programs require an individual to satisfy a standard related to a health factor to obtain a reward. This standard may be performing or completing an activity relating to a health factor, or it may be attaining or maintaining a specific health outcome. Under the final regulations, health-contingent wellness programs are further divided into activity-only wellness programs and outcome-based wellness programs.

In an important change from previous guidance, some programs that previously have been considered participatory programs, such as a walking program, are now classified as a activity health contingent program.  

• Activity-only health contingent wellness program - A program where an individual is required to perform or complete an activity related to a health factor in order to obtain a reward, but is not required to attain or maintain a specific health outcome. Examples include walking, diet, or exercise programs.
  
  Some individuals participating in an activity-only wellness program may be unable to participate in or complete (or have difficulty participating in or completing) the program's prescribed activity due to a health factor, so these individuals must be given a reasonable alternative opportunity to qualify for the reward.

• Outcome-based health contingent wellness program - A program where an individual must attain or maintain a specific health outcome (such as not smoking or attaining certain results on biometric screenings) in order to obtain a reward.
  
  As with the activity based programs, individuals who do not attain or maintain the specific health outcome must be offered an alternative to earn the reward. An activity based option may be offered as an alternative to the outcome based program to achieve the same reward.