It’s for Your Own Good: Tobacco Surcharges in Health Plans and other Wellness Incentives

A health-contingent program is a program that conditions eligibility for a reward on a participant's ability to meet a standard related to a health factor. For example, a tobacco cessation program can be designed as a health-contingent wellness program. This program offers incentives, such as a premium discount, to a participant to quit smoking. The program must follow HIPAA nondiscrimination rules by promoting health or preventing disease, offering reasonable alternatives, and allowing individuals to qualify for rewards annually. Another example is a premium discount wellness program, where the employer or insurer offers a discount or incentive (e.g., gift cards, vacation days) for employees to participate in healthy lifestyle activities.

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• HIPAA Non-discrimination Notice for Wellness Programs
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