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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 22 attorneys engaged exclusively in employee benefits, estate planning and employment law. Five 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


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
7121 Fairway Drive
Suite 203
Palm Beach Gardens, FL 33418


San Francisco Office

Tel: (415) 625-0002

Fax: (415) 829-4385

315 Montgomery Street

Suite 902

San Francisco, CA 94104





November 29, 2012 

 State and Federal Law Alert


Agencies Issue New Proposed Wellness Program Regulations 


IRS, and the Departments of Labor and Health and Human Services have issued proposed regulations on permitted incentives for wellness programs in group health plans. This proposal reflects the changes to the wellness program rules under the Patient Protection and Affordable Care Act.


Basically, a group health plan may not discriminate against an individual because of health status. This prohibited discrimination would include discrimination as to: eligibility to enroll in a plan; contributions paid by an individual; or benefits paid. The benefits prohibition would include any differences in required deductibles or co-payments. However, certain rewards are permitted under wellness programs.


The proposal states that there are two types of wellness programs. The first, a "participatory wellness program," is made available to all similarly situated individuals and either: (1) does not provide a reward; or, (2) does not condition the reward on satisfying a health status factor. Examples would include a program that rewards participation in a health education seminar or a program that pays for part of the cost of membership in a fitness center. The amount of the reward for this type of wellness program is not restricted.


The second type of wellness program is a "health-contingent wellness program" that offers a reward if a participating individual satisfies a standard related to a health status factor. The nondiscrimination rules do not prevent a health plan from providing employee contribution discounts or rebates, or modifying copayments or deductibles, in return for participating in a health-contingent wellness program, if certain condition are met:  

  • Frequency:  Individuals must be given the opportunity to qualify for the reward at least once per year.
  • Reward Limitation:  The total reward for meeting a health standard generally must not exceed 30% of the total cost of employee-only coverage (50% for non-smoking rewards), taking into account both employer and employee contributions. However, if family members can participate in the wellness program, the reward can equal the applicable percentage of the total cost of the coverage of the plan option selected (e.g., employee-plus-one or family coverage).
  • Uniform Availability:  Rewards must be available to all similarly-situated individuals. An alternative health standard must also be available to individuals for whom it is: (1) unreasonably difficult, due to a medical condition, to satisfy the wellness program's health standard; or, (2) medically inadvisable to attempt to satisfy the otherwise applicable standard. For example, if an individual can demonstrate that it is unreasonably difficult to lower his cholesterol level to 200 because of a medical condition, an alternative must be made available to that individual with the same reward, such as following the recommendations of a nurse or passing a course on nutrition.
  • Reasonable Design:  There must be a reasonable connection between a wellness program's health standard and the promotion of good health. Therefore, the program must provide a reasonable chance of improving the health of, or preventing disease in, participating individuals, without being overly burdensome.
  • Disclosure:  Any materials that describe the plan must disclose that an alternative health standard is available. However, the materials need not describe the terms of the alterative standard. Sample language is provided in the proposed regulations.

The final regulations are to be effective for plan years beginning on or after January 1, 2014.




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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.