Texas Administrative Code
Title 28 - INSURANCE
Part 1 - TEXAS DEPARTMENT OF INSURANCE
Chapter 21 - TRADE PRACTICES
Subchapter MM - WELLNESS PROGRAMS
Section 21.4708 - Outcome-Based Wellness Programs
Universal Citation: 28 TX Admin Code § 21.4708
Current through Reg. 50, No. 13; March 28, 2025
(a) A health-contingent wellness program that requires an individual to attain or maintain a specific health outcome in order to obtain a reward is an outcome-based wellness program.
(b) An outcome-based wellness program does not violate this subchapter so long as the requirements of this section are met.
(1)
Size of reward. The reward for the outcome-based wellness program, coupled with
the reward for other health-contingent wellness programs with respect to the
plan, must not exceed in total value 30 percent of the cost of employee-only or
member-only coverage under the plan; or 50 percent of the cost of employee-only
or member-only coverage under the plan, to the extent that the additional 20
percent is in connection with a program designed to prevent or reduce tobacco
use. However, if, in addition to employees or members, any class of
dependents--such as spouses or spouses and dependent children--may participate
in the outcome-based wellness program, the reward must not exceed 30 percent of
the cost of the coverage in which an employee or member and any dependents are
enrolled; or 50 percent of the cost of the coverage in which an employee or
member and any dependents are enrolled, to the extent that the additional 20
percent is in connection with a program designed to prevent or reduce tobacco
use.
(A) For purposes of this section, the
cost of coverage is determined based on the total amount of employer and
employee contributions toward the cost of coverage, or member contributions
toward the cost of coverage, for the benefit package under which the employee
or member is, or the employee or member and any dependents are, receiving
coverage.
(B) A reward can be in
the form of a discount or rebate of a premium or contribution; a waiver of all
or part of a cost-sharing mechanism such as deductibles, copayments, or
coinsurance; the absence of a surcharge; or the value of a benefit that would
otherwise not be provided under the plan.
(2) Reasonable design. The outcome-based
wellness program must be reasonably designed to promote health or prevent
disease. An outcome-based wellness program satisfies this standard if it has a
reasonable chance of improving the health of, or preventing disease in,
participating individuals and it is not overly burdensome, is not a subterfuge
for discriminating based on a health factor, and is not highly suspect in the
method chosen to promote health or prevent disease. This determination is based
on all the relevant facts and circumstances. To ensure that an outcome-based
wellness program is reasonably designed to improve health and does not act as a
subterfuge for underwriting or reducing benefits based on a health factor, a
reasonable alternative standard to qualify for the reward must be provided to
any individual who does not meet the initial standard based on a measurement,
test, or screening that is related to a health factor, as explained in
paragraph (4) of this subsection.
(3) Frequency of opportunity to qualify. The
outcome-based wellness program must give individuals eligible for the program
the opportunity to qualify for the reward under the program at least once per
year.
(4) Uniform availability and
reasonable alternative standards. The full reward under the outcome-based
wellness program must be available to all similarly situated individuals.
(A) Under this paragraph, a reward under an
outcome-based wellness program is not available to all similarly situated
individuals for a period unless the program allows a reasonable alternative
standard (or waiver of the otherwise applicable standard) for obtaining the
reward for any individual who does not meet the initial standard based on the
measurement, test, or screening, as described in this paragraph.
(B) To the extent that a reasonable
alternative standard under an outcome-based wellness program is an
activity-only wellness program, it must comply with the requirements of §
21.4707 of this title in the same
manner as if it were an initial program standard. To the extent that a
reasonable alternative standard under an outcome-based wellness program is
another outcome-based wellness program, it must comply with the requirements of
this section, subject to the following requirements:
(i) The reasonable alternative standard
cannot be a requirement to meet a different level of the same standard without
additional time to comply that takes into account the individual's
circumstances.
(ii) An individual
must be given the opportunity to comply with the recommendations of the
individual's personal physician as a second reasonable alternative standard to
meeting the reasonable alternative standard defined by the plan or issuer, but
only if the physician joins in the request. The individual can make a request
to involve a personal physician's recommendations at any time, and the personal
physician can adjust the physician's recommendations at any time, consistent
with medical appropriateness.
(C) It is not reasonable to seek verification
under an outcome-based wellness program, such as a statement from an
individual's personal physician, that a health factor makes it unreasonably
difficult for the individual to satisfy, or medically inadvisable for the
individual to attempt to satisfy, the otherwise applicable standard as a
condition of providing a reasonable alternative to the initial standard.
However, if a plan or issuer provides an alternative standard to the otherwise
applicable measurement, test, or screening that involves an activity that is
related to a health factor, then the requirements of §
21.4707 of this title for
activity-only wellness programs apply to that component of the wellness
program, and the plan or issuer may, if reasonable under the circumstances,
seek verification that it is unreasonably difficult due to a medical condition
for an individual to perform or complete the activity or it is medically
inadvisable to attempt to perform or complete the activity.
(5) Notice of availability of
reasonable alternative standard. The plan or issuer must disclose in all plan
materials describing the terms of an outcome-based wellness program, and in any
disclosure that an individual did not satisfy an initial outcome-based
standard, the availability of a reasonable alternative standard to qualify for
the reward and, if applicable, the possibility of waiver of the otherwise
applicable standard, including contact information for obtaining a reasonable
alternative standard and a statement that recommendations of an individual's
personal physician will be accommodated. If plan materials merely mention that
such a program is available, without describing its terms, this disclosure is
not required.
Disclaimer: These regulations may not be the most recent version. Texas may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
