Health care reform boosts number of wellness incentives employers can offer

Midsize employers will have greater clout to reward workers’ healthy behaviors under the Patient Protection and Affordable Care Act, which boosts the amount of financial incentives that employers can offer beginning in 2014.

While permissible financial incentives are limited to 20% of the cost of single coverage under the Health Insurance Portability and Accountability Act, that threshold will grow to 30% under PPACA. In addition, employers will be allowed to offer incentives equal to 50% of the cost of single coverage to discourage tobacco use.

But to prevent employers from discriminating against employees with medical conditions that might preclude them from meeting employers’ criteria to qualify for the new financial incentives, the Labor Department has established rules employers must follow (see box).

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