CMS to Pilot Wellness Programs in Individual Market

The Centers for Medicare & Medicaid Services (CMS) recently announced plans to pilot healthcontingent wellness programs in the individual market, a practice that has been previously prohibited. However, the Affordable Care Act (ACA) included a provision calling for health-contingent wellness  programs to be tested in the individual market, and that time has now come.   

In the past, only participatory wellness programs have been allowed in the individual market. Participatory wellness programs reward individuals for participating in the wellness program without assessing if it led to health-related outcomes. Health-contingent wellness programs reward people for not only participating in a wellness program, but also meeting a specific health standard, such as losing weight, lowering cholesterol levels or reducing/eliminating tobacco usage.  

In a bulletin issued on September 30, 2019, CMS indicated they are seeking applications from states to participate in the pilot program. It is anticipated that 10 states will be selected to participate in the pilot program. The states selected will be able to offer lower premiums or offer other incentives to individuals meeting the requirements of the health-contingent wellness program. 

CMS has indicated it won’t approve applications from states if it will lead coverage losses or rises in the cost of federal subsidies which are provided through the Health Insurance Marketplace. The wellness programs also can’t discriminate based on health status, and an alternative to the wellness program will have to be provided for individuals who can’t participate due to a medical condition. 

Collectively, the Department of Health and Human Services (HHS), Department of Labor (DOL) and Department of Treasury (DOT) will evaluate the effectiveness of the pilot program. If the pilot program is deemed effective, the application process will open to additional states.