ACA Implementation FAQs Part 74 Provide Guidance on Health-Contingent Wellness Programs, Including Tobacco Cessation Programs

The Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury (collectively, the Departments) released Affordable Care Act (ACA) and Health Insurance Portability and Accountability Act (HIPAA) Implementation Frequently Asked Questions (FAQs) Part 74 addressing health-contingent wellness programs, including tobacco-related wellness programs. The FAQs cover completion of reasonable alternative standard and disclosure requirements. 

The new guidance comes after tobacco-related wellness programs have been the subject of recent class-action lawsuits challenging the tobacco surcharges some employers add to premiums for their group health plans through workplace wellness programs. The FAQs released today announce the Departments’ approach to enforcement for health-contingent wellness programs that reward an employee if they satisfy a standard related to a health factor.

Until further guidance or regulations are issued, the departments will not take enforcement action against plans or issuers that do not give employees the wellness program reward retroactively to the beginning of the plan year after the employee completes a reasonable alternative standard. Under the terms of the enforcement relief in these FAQs, plans and issuers only need to provide the reward prospectively, from the point where the employee completes the alternative standard, if retroactive rewards are not otherwise provided.

DOL News Release