Parsonage Vandenack Williams LLC
Attorneys at Law Licensed in Nebraska, Iowa, Michigan,
South Dakota, Texas, Arizona, and Colorado

The Patient Protection and Affordable Care Act: Wellness Program Demonstration Project

I. GENERAL INFORMATION

Section 1201-2705 of the Patient Protection and Affordable Care Act of 2010 (the “PPACA”) is entitled “prohibiting discrimination against individual participants and beneficiaries based on health status.”

Section 1201-2705(j) authorizes employers to offer employee rewards—in the form of premium discounts, waivers of cost-sharing requirements, or benefits that would otherwise not be provided—of up to 30% of the cost of coverage for participating in a wellness program and meeting certain health-related standards. Employers must offer an alternative standard for individuals for whom it is unreasonably difficult or inadvisable to meet the standard. The reward limit may be increased to 50% of the cost of coverage if deemed appropriate. This provision is effective January 1, 2014.

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