“Reasonable Alternatives” – Finalized Outcome Based Wellness Program Rules; effective health insurance plan year on or after January 1, 2014

As part of health care reform, wellness programs that provide incentives based on specific health metrics (i.e. BMI, cholesterol, etc.) will be required to offer “reasonable alternative standards” to employees who do not meet the initial requirements. The final rules also increase the maximum dollar amount of rewards or surcharges to 30% of the total premium cost of health care coverage (up from 20%) and up to 50% for incentives tied to smoking prevention or reduction programs. * Reasonable alternative standards: Employees must be given an opportunity to qualify for the reward if they fail to meet the initial standard. For example, an employer could charge higher premium contributions to employees or spouses who have a Body Mass Index (BMI) in excess of 30. Therefore, the employer would have to offer an alternative means for participants to avoid the surcharge. [...]