| (a) A health-contingent wellness program that requires
an individual to attain or maintain a specific health outcome in order
to obtain a reward is an outcome-based wellness program.
(b) An outcome-based wellness program does not violate
this subchapter so long as the requirements of this section are met.
(1) Size of reward. The reward for the outcome-based
wellness program, coupled with the reward for other health-contingent
wellness programs with respect to the plan, must not exceed in total
value 30 percent of the cost of employee-only or member-only coverage
under the plan; or 50 percent of the cost of employee-only or member-only
coverage under the plan, to the extent that the additional 20 percent
is in connection with a program designed to prevent or reduce tobacco
use. However, if, in addition to employees or members, any class of
dependents--such as spouses or spouses and dependent children--may
participate in the outcome-based wellness program, the reward must
not exceed 30 percent of the cost of the coverage in which an employee
or member and any dependents are enrolled; or 50 percent of the cost
of the coverage in which an employee or member and any dependents
are enrolled, to the extent that the additional 20 percent is in connection
with a program designed to prevent or reduce tobacco use.
(A) For purposes of this section, the cost of coverage
is determined based on the total amount of employer and employee contributions
toward the cost of coverage, or member contributions toward the cost
of coverage, for the benefit package under which the employee or member
is, or the employee or member and any dependents are, receiving coverage.
(B) A reward can be in the form of a discount or rebate
of a premium or contribution; a waiver of all or part of a cost-sharing
mechanism such as deductibles, copayments, or coinsurance; the absence
of a surcharge; or the value of a benefit that would otherwise not
be provided under the plan.
(2) Reasonable design. The outcome-based wellness program
must be reasonably designed to promote health or prevent disease.
An outcome-based wellness program satisfies this standard if it has
a reasonable chance of improving the health of, or preventing disease
in, participating individuals and it is not overly burdensome, is
not a subterfuge for discriminating based on a health factor, and
is not highly suspect in the method chosen to promote health or prevent
disease. This determination is based on all the relevant facts and
circumstances. To ensure that an outcome-based wellness program is
reasonably designed to improve health and does not act as a subterfuge
for underwriting or reducing benefits based on a health factor, a
reasonable alternative standard to qualify for the reward must be
provided to any individual who does not meet the initial standard
based on a measurement, test, or screening that is related to a health
factor, as explained in paragraph (4) of this subsection.
(3) Frequency of opportunity to qualify. The outcome-based
wellness program must give individuals eligible for the program the
opportunity to qualify for the reward under the program at least once
per year.
(4) Uniform availability and reasonable alternative
standards. The full reward under the outcome-based wellness program
must be available to all similarly situated individuals.
(A) Under this paragraph, a reward under an outcome-based
wellness program is not available to all similarly situated individuals
for a period unless the program allows a reasonable alternative standard
(or waiver of the otherwise applicable standard) for obtaining the
reward for any individual who does not meet the initial standard based
on the measurement, test, or screening, as described in this paragraph.
(B) To the extent that a reasonable alternative standard
under an outcome-based wellness program is an activity-only wellness
program, it must comply with the requirements of §21.4707 of
this title in the same manner as if it were an initial program standard.
To the extent that a reasonable alternative standard under an outcome-based
wellness program is another outcome-based wellness program, it must
comply with the requirements of this section, subject to the following
requirements:
(i) The reasonable alternative standard cannot be a
requirement to meet a different level of the same standard without
additional time to comply that takes into account the individual's
circumstances.
(ii) An individual must be given the opportunity to
comply with the recommendations of the individual's personal physician
as a second reasonable alternative standard to meeting the reasonable
alternative standard defined by the plan or issuer, but only if the
physician joins in the request. The individual can make a request
to involve a personal physician's recommendations at any time, and
the personal physician can adjust the physician's recommendations
at any time, consistent with medical appropriateness.
(C) It is not reasonable to seek verification under
an outcome-based wellness program, such as a statement from an individual's
personal physician, that a health factor makes it unreasonably difficult
for the individual to satisfy, or medically inadvisable for the individual
to attempt to satisfy, the otherwise applicable standard as a condition
of providing a reasonable alternative to the initial standard. However,
if a plan or issuer provides an alternative standard to the otherwise
applicable measurement, test, or screening that involves an activity
that is related to a health factor, then the requirements of §21.4707
of this title for activity-only wellness programs apply to that component
of the wellness program, and the plan or issuer may, if reasonable
under the circumstances, seek verification that it is unreasonably
difficult due to a medical condition for an individual to perform
or complete the activity or it is medically inadvisable to attempt
to perform or complete the activity.
(5) Notice of availability of reasonable alternative
standard. The plan or issuer must disclose in all plan materials describing
the terms of an outcome-based wellness program, and in any disclosure
that an individual did not satisfy an initial outcome-based standard,
the availability of a reasonable alternative standard to qualify for
the reward and, if applicable, the possibility of waiver of the otherwise
applicable standard, including contact information for obtaining a
reasonable alternative standard and a statement that recommendations
of an individual's personal physician will be accommodated. If plan
materials merely mention that such a program is available, without
describing its terms, this disclosure is not required.
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