Outcomes-Based Wellness Program

Last Updated: October 25, 2020

Definition - What does Outcomes-Based Wellness Program mean?

An outcomes-based wellness program is one of two categories of workplace wellness programs defined by the Affordable Care Act (ACA). Outcomes-based wellness programs are employer sponsored health and wellness programs that use outcomes-based incentives to encourage employee participation. Outcomes-based wellness programs require participants to achieve specified health-related goals in order to receive a reward or incentive. This is in contrast to participatory wellness programs that provide an incentive based on enrollment alone. To earn incentives under an outcomes-based wellness program, employees may be required to take a specific action or achieve a target health goal. Outcomes-based wellness programs may also be called health-contingent wellness programs.

WorkplaceTesting explains Outcomes-Based Wellness Program

Outcomes-based wellness programs encourage employee participants to not only enroll in an employer's health and wellness program, but to take specified health-related actions. As such, these programs are sometimes considered more aggressive than a participation-based program. Outcomes-based wellness programs may include rewards or penalties as incentives to prompt employees to achieve specified health goals. For instance, an outcomes-based wellness program may impose a surcharge on employees who smoke or do not take advantage of preventative care services. Some outcomes-based incentives require employees to first participate in a screening step. Those employees identified as needing intervention during the screening process may then be given specific health goals, such as lowered blood pressure or weight loss. Achieving this goal is necessary to earn the program's reward.

Regardless of the type of reward or penalty offered, outcomes-based wellness programs must comply with the Affordable Care Act (ACA) guidelines and may not violate the Americans With Disabilities Act or other laws. Among other things, these laws limit the total value of incentives that may be offered and prohibit discriminatory practices.

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