For many employees, the benefits of maintaining a healthy lifestyle aren’t just physical; they are financial. Through health-contingent wellness programs, employers can offer monetary rewards or reduced health insurance costs to employees who achieve specified health-related goals. These programs may focus on nutrition, weight loss, tobacco cessation, fitness, substance abuse assistance, stress management, or general health education.
However, determining what rewards employees are eligible for, and when those rewards must be provided, has long presented a compliance challenge for employers. After years of uncertainty, federal regulators have provided long-awaited guidance for employers sponsoring health-contingent wellness programs under HIPAA and the Affordable Care Act (ACA), clarifying whether employees who earn certain wellness incentives mid-year must receive those rewards retroactively or only prospectively.
Suspension of Enforcement of Retroactive Wellness Incentive Payments
On August 26, 2026, the U.S. Departments of Labor, Health and Human Services, and the Treasury jointly announced that, until further guidance or regulations are issued, they will not take enforcement action against plans or issuers that do not provide wellness program rewards retroactive to the beginning of the plan year when an employee completes a “reasonable alternative standard.” This question has recently been raised in numerous class-action lawsuits challenging tobacco surcharges some...
On October 22, 2026, the US Department of Justice (DOJ) Civil Division and the US Department of Health and Human Services (HHS) announced a six-month Healthcare False Claims Act Self-Disclosure Pil...