By Lin­da Rowings

questionWe field a lot of ques­tions from employ­ers about well­ness pro­grams and how they com­ply with PPACA.  Here are two of the most com­mon ones from UBA’s “Fre­quent­ly Asked Ques­tions (FAQ) About Well­ness Pro­grams’ Legal Requirements”:

Q:      How does a well­ness pro­gram affect afford­abil­i­ty calculations?

A:      The pro­posed reg­u­la­tions pro­vide that when decid­ing if the employee’s share of the pre­mi­um is afford­able (less than 9.5% of the employee’s safe har­bor income), the employ­er may not con­sid­er well­ness incen­tives or sur­charges except for a non-smok­ing incen­tive. In oth­er words, the pre­mi­um for non-smok­ers will be used to deter­mine afford­abil­i­ty (even for smok­ers). Any oth­er type of well­ness incen­tive must be disregarded.

Exam­ple: Acme has a well­ness pro­gram that reduces pre­mi­ums by $300 for employ­ees who do not use tobac­co prod­ucts or who com­plete a smok­ing ces­sa­tion course. Pre­mi­ums are reduced by $200 if an employ­ee com­pletes cho­les­terol screen­ing dur­ing the plan year. The annu­al employ­ee pre­mi­um is $4,000. Employ­ee B does not use tobac­co and com­plet­ed the cho­les­terol screen, so the cost of his actu­al pre­mi­um is $3,500 [$4,000 — 300 — 200]. Employ­ee C uses tobac­co and does not do the cho­les­terol screen, so the cost of her actu­al pre­mi­ums is $4,000. For pur­pos­es of afford­abil­i­ty, Acme will use $3,700 as the cost of cov­er­age for both Employ­ee B and Employ­ee C [$4,000 less the avail­able $300 non-smok­er discount].

Q:      How does a well­ness pro­gram affect min­i­mum val­ue calculations?

A:      When cal­cu­lat­ing min­i­mum val­ue, if incen­tives for nonuse of tobac­co may be used to reduce cost-shar­ing (i.e., the deductible or out-of-pock­et costs), those incen­tives may be tak­en into account when deter­min­ing min­i­mum val­ue. Oth­er types of well­ness incen­tives that affect cost-shar­ing may not be considered.

For near­ly 50 fre­quent­ly asked ques­tions and answers about well­ness pro­grams Unit­ed Ben­e­fit Advi­sors (UBA) request UBA’s “Fre­quent­ly Asked Ques­tions (FAQ) About Well­ness Pro­grams’ Legal Require­ments”. For gen­er­al high­lights about well­ness pro­grams, down­load “High­lights of the Well­ness pro­gram Require­ments”.

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