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The Wagner Law Group Description 

The Wagner Law Group, A Professional Corporation, is a nationally recognized ERISA & employee benefits, estate planning, employment, labor & human resources practice. 


Established in 1996, The Wagner Law Group has 23 attorneys engaged exclusively in employee benefits, estate planning and employment law. Seven of our attorneys are AV rated by Martindale-Hubbell as having very high to preeminent legal abilities and ethical standards. The firm is among the largest ERISA boutiques in the country. Our practice is national in scope, with clients in more than 40 states and several foreign countries.



Contact Info

The Wagner Law Group


  Integrity | Excellence


Massachusetts Office 

Tel: (617) 357-5200 

Fax: (617) 357-5250 

99 Summer Street 

13th Floor

Boston, MA 02110

Florida Office 

Tel: (561) 293-3590
Fax: (561) 293-3591
7108 Fairway Drive
Suite 125
Palm Beach Gardens, FL 33418


San Francisco Office

Tel: (415) 625-0002

Fax: (415) 358-8300

315 Montgomery Street

Suite 904

San Francisco, CA 94104





June 6, 2013 

 State and Federal Law Alert


Agencies Issue Final Wellness Program Regulations


IRS, DOL and HHS have issued final regulations addressing employee wellness programs under the Patient Protection and Affordable Care Act ("PPACA"). These regulations apply to insured and self-insured group health plans (including grandfathered and non-grandfathered plans) for plan years beginning on or after January 1, 2014. 


The final regulations:  

  • Retain the concepts of "participatory" and "health-contingent" wellness programs:
    • Participatory wellness programs focus on participation and do not base rewards on meeting specific health status factors. Examples include programs that reward participation in a health education seminar or pay for part of the cost of membership in a fitness center.
    • Health-contingent wellness programs provide a reward for satisfying a standard related to a health status factor. Under these programs: 1) individuals must be given the opportunity to qualify for the reward at least once per year; 2) rewards must be available to all similarly-situated individuals; 3) the total reward for meeting a health standard generally must not exceed 30% of the cost of employee-only coverage; 4) there must be a reasonable connection between a wellness program's health standard and the promotion of good health; and 5) materials that describe the plan must disclose that an alternative health standard is available.
  • Categorize health-contingent programs as either "activity-based" or "outcome-based":
    • Activity-based programs do not require individuals to attain specific health outcomes. Examples include walking, diet or exercise programs.
    • Outcome-based programs require individuals to attain a specific health outcome. Wellness programs associated with achieving a certain BMI, cholesterol level or nonsmoker status are considered outcome based. 
  • Maintain the requirement that health-contingent programs must provide a reasonable alternative standard under which participants can obtain the reward:
    • Activity-based wellness programs must provide reasonable alternative standards to individuals who do not meet the initial standard due to a medical issue or condition (e.g., individuals who cannot participate in a walking program due to recent surgery or medical condition).
    • Outcome-based wellness programs must provide reasonable alternative standards to individuals who do not meet an initial standard that is related to a health factor (e.g., individuals with high cholesterol). In a significant change from the earlier regulations, the alternative standard must be provided to all individuals who do not meet the program's standards, regardless of any medical condition or other health status. 
  • Require wellness programs to provide greater deference to the opinion of an individual's personal physician. Under the proposed regulations, where a personal physician found that a plan's alternative standard was medically inappropriate for the individual, the plan was required to provide a different standard which accommodated the physician's recommendations. The final regulations maintain this requirement. However, the final regulations also require the program to permit the individual to satisfy the recommendations of his or her personal physician as a second reasonable alternative under an outcome-based program, even where the program's alternative standard is not medically inappropriate. 

HIPAA authorizes the IRS to impose an excise tax penalty of $100 per day of noncompliance for each affected individual on employers that sponsor noncompliant wellness programs. The DOL is also actively auditing plans for compliance with the wellness program rules and is empowered to bring a civil action against an employer to enforce these requirements.


To avoid costly penalties and unwanted litigation, employers that sponsor wellness programs are advised to consult with qualified benefits advisors to ensure that their programs meet the requirements contained in the final regulations.



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Pursuant to Internal Revenue Service Circular 230, we hereby inform you that any advice set forth herein with respect to US federal tax issues is not intended or written by The Wagner Law Group to be used and cannot be used, by you or any taxpayer, for the purpose of avoiding penalties that may be imposed on you or any other person under the Internal Revenue Code.


This Newsletter is provided for information purposes by The Wagner Law Group to clients and others who may be interested in the subject matter, and may not be relied upon as specific legal advice.  This material is not to be construed as legal advice or legal opinions on specific facts. Under the Rules of the Supreme Judicial Court of Massachusetts, this material may be considered advertising.