As an employer interested in implementing a wellness program within your organization, you may also be looking to see health-related results from your employees. A results driven wellness program, more commonly known as a health-contingent wellness program, ties a reward to the completion of a specific health-related outcome (such as meeting or improving a biometric screening result). A health-contingent wellness program differs from a participatory-based wellness program where no health-related outcome needs to be achieved in order to receive a reward.

Regulations and Compliance

In order to successfully implement a health-contingent wellness program it is imperative that the five requirements of the Health Insurance Portability & Accountability Act (HIPAA) non-discrimination guidelines and regulations under the Affordable Care Act (ACA) are followed (click here to view final regulations). The five requirements went into effect on January 1, 2014. Overviews of the five requirements are as follows:

  • Reasonable Design

The wellness program must have a reasonable chance of improving health or preventing disease and must not be overly burdensome.

  • Annual Qualifications

Participants must be allowed to qualify for the program reward (or absence of penalty) at least once per year.

  • Amount of Reward/Penalty

The size of the reward (or absence of a penalty) is limited.

  • Uniform Availability and Reasonable Alternatives Standards

The full reward must be available to all “similarly situated individuals.” All participants in a health-contingent program that do not meet the health outcome must be provided with a reasonable alternative in order to receive the full incentive or avoid the penalty.

  • Notification of the Alternatives

Wellness plan/program documents must disclose availability of a reasonable alternative in materials describing the program.

Incorporating a Health‑Contingent Wellness Program

By partnering with a corporate wellness provider, such as Well Nation®, on a proper program design, delivering a communication plan and providing reasonable alternatives, your organization will be positioned for a successful health-contingent wellness program. Use the Health-Contingent Key Considerations to outline some of the key steps required of health-contingent programs. Also visit for more information on how Well Nation® can help your organization implement a health‑contingent wellness program.

The following outlines some of the key considerations of a health‑contingent wellness program. To view the final Affordable Care Act (ACA) regulations and health-contingent program requirements click here.

Reasonable Design

  • Determine a reasonable alternative

Annual Qualifications

  • Determine the enrollment process for all employees
  • Regulation:
    • Employees must be given the chance to qualify once per year

Reward and/or Penalty

  • Establish a reward and/or penalty
  • Regulations:
    • Employee-only coverage: The reward cannot exceed 30% of the total cost coverage, if the design is to prevent or reduce tobacco use, the reward cannot exceed 50%
    • Employee-spouse or family coverage: The reward cannot exceed 30% of the total cost coverage, if the design is to prevent or reduce tobacco use, the reward cannot exceed 50%

Uniform Availability and Reasonable Alternatives Standards

  • Determine a reasonable time commitment
  • Establish alternate reasonable alternative or waiver
  • Regulation:
    • If deemed not medically appropriate by a physician, an alternate reasonable alternative or waiver must be provided consistent with medical appropriateness.

Notification of the Alternatives

  • Create communication document(s)
  • Regulation:
    • Documents must include contact information for obtaining the alternative and a statement that recommendations of an individual’s personal physician will be accommodated