article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Building Efforts for Wellness and Encouraging Longer Lives Act'' or the ``BE WELL Act''. SEC. 2. PROGRAMS OF HEALTH PROMOTION AND DISEASE PREVENTION. (a) Internal Revenue Code of 1986.--Section 9802 of the Internal Revenue Code of 1986 is amended-- (1) by redesignating the second subsection (f) as subsection (g); and (2) by adding at the end the following: ``(h) Programs of Health Promotion and Disease Prevention.-- ``(1) Applicability.--The following shall apply with respect to a program of health promotion or disease prevention for purposes of subsection (b)(2)(B). Such programs shall be referred to as `wellness programs'. ``(2) Definition and general rule.-- ``(A) Definition.--For purposes of this subsection, a wellness program is any program designed to promote health or prevent disease, including a program designed to encourage individuals to adopt healthy behaviors. ``(B) General rule.--For purposes of subsections (a)(2) and (b)(2) (which provide exceptions to the general prohibitions against discrimination based on a health factor for group health plan provisions that vary benefits (including cost-sharing mechanisms) or the premium or contribution for similarly situated individuals in connection with a wellness program that satisfies the requirements of this subsection), if none of the conditions for obtaining a reward under a wellness program are based on an individual satisfying a standard that is related to a health factor, under this subsection, such wellness program does not violate this section if participation in the program is made available to all similarly situated individuals. If any of the conditions for obtaining a reward under such a wellness program is based on an individual satisfying a standard that is related to a health factor, the wellness program shall not violate this section if the requirements of paragraph (4) of this section are satisfied. ``(3) Wellness programs not subject to requirements.--If none of the conditions for obtaining a reward under a wellness program are based on an individual satisfying a standard that is related to a health factor (or if a wellness program does not provide a reward), the wellness program shall not violate this section, if participation in the program is made available to all similarly situated individuals. Such programs need not satisfy the requirements of paragraph (4), if participation in the program is made available to all similarly situated individuals. Wellness programs described in this paragraph include the following: ``(A) A program that reimburses all or part of the cost for memberships in a fitness center. ``(B) A diagnostic testing program that provides a reward for participation and does not base any part of the reward on outcomes. ``(C) A program that encourages preventive care through the waiver of the copayment or deductible requirement under a group health plan for the costs of, for example, prenatal care or well-baby visits. ``(D) A program that reimburses employees for the costs of smoking cessation programs without regard to whether the employee quits smoking. ``(E) A program that provides a reward to employees for attending a monthly health education seminar. ``(4) Wellness programs subject to requirements.--If any of the conditions for obtaining a reward under a wellness program is based on an individual satisfying a standard that is related to a health factor, the wellness program shall not violate this section if the requirements of this paragraph are satisfied. ``(A) The reward for the wellness program, coupled with the reward for other wellness programs with respect to the plan that require satisfaction of a standard related to a health factor, shall not exceed 30 percent of the cost of employee-only coverage under the plan. However, if, in addition to employees, any class of dependents (such as spouses or spouses and dependent children) may participate in the wellness program, the reward shall not exceed 30 percent of the cost of the coverage in which an employee and any dependents are enrolled. For purposes of this paragraph, the cost of coverage shall be determined based on the total amount of employer and employee contributions for the benefit package under which the employee is (or the employee and any dependents are) receiving coverage. A reward may 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. The Secretaries of Labor, Health and Human Services, and the Treasury may increase the reward available under this subparagraph to up to 50 percent of the cost of coverage under the plan if such Secretaries determine that such an increase is appropriate. ``(B) The wellness program shall be reasonably designed to promote health or prevent disease. A program satisfies this subparagraph 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. At least once per year, each plan or issuer offering a wellness program shall evaluate the reasonableness of such program. ``(C) The program shall give individuals eligible for the program the opportunity to qualify for the reward under the program at least once per year. ``(D)(i) The reward under the program shall be available to all similarly situated individuals. ``(ii) For purposes of clause (i), a reward is not available to all similarly situated individuals for a period unless the program allows-- ``(I) a reasonable alternative standard (or waiver of the otherwise applicable standard) for obtaining the reward for any individual for whom, for that period, it is unreasonably difficult due to a medical condition to satisfy the otherwise applicable standard; and ``(II) a reasonable alternative standard (or waiver of the otherwise applicable standard) for obtaining the reward for any individual for whom, for that period, it is medically inadvisable to attempt to satisfy the otherwise applicable standard. ``(iii) A plan or issuer may seek verification, such as a statement from an individual's physician, that a health factor makes it unreasonably difficult or medically inadvisable for the individual to satisfy or attempt to satisfy the otherwise applicable standard. ``(E)(i) The plan or issuer shall disclose in all plan materials describing the terms of the program the availability of a reasonable alternative standard (or the possibility of waiver of the otherwise applicable standard) required under subparagraph (D). If plan materials merely mention that a program is available, without describing its terms, such disclosure is not required. ``(ii) The following language, or similar language, may be used to satisfy the requirement of this subparagraph: `If it is unreasonably difficult due to a medical condition for you to achieve the standards for the reward under this program, or if it is medically inadvisable for you to attempt to achieve the standards for the reward under this program, call us at [insert telephone number] and we will work with you to develop another way to qualify for the reward.'. ``(5) Regulations.--The Secretaries of Labor, Health and Human Services, and the Treasury may promulgate regulations, as appropriate, to carry out this subsection. ``(6) Effective date.--This subsection shall take effect on the date of enactment of the BE WELL Act. ``(7) Existing wellness programs.--During the period of time between the date of enactment of the BE WELL Act and the date on which the Secretaries of Labor, Health and Human Services, and the Treasury establish regulations to effectuate this subsection, a wellness program that was established prior to the date of enactment of the BE WELL Act may continue to operate in accordance with the requirements in effect on the day before such date of enactment.''. (b) PHSA Group Market.--Section 2702(b) of the Public Health Service Act (42 U.S.C. 300gg-1(b)) is amended by adding at the end the following: ``(4) Programs of health promotion and disease prevention.--The provisions of section 9802(h) of the Internal Revenue Code of 1986 shall apply to programs of health promotion and disease prevention offered through a group health plan or a health insurance issuer offering group health insurance coverage.''. (c) ERISA.--Section 702(b) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1182(b)) is amended by adding at the end the following: ``(4) Programs of health promotion and disease prevention.--The provisions of section 9802(h) of the Internal Revenue Code of 1986 shall apply to programs of health promotion and disease prevention offered through a group health plan or a health insurance issuer offering group health insurance coverage.''. (d) Application of Wellness Programs Provisions to Carriers Providing Federal Employee Health Benefits Plans.-- (1) In general.--Notwithstanding section 8906 of title 5, United States Code (including subsections (b)(1) and (b)(2) of such section), subsections (a), (b), and (c) of this section, including the amendments made by those subsections (relating to wellness programs), shall apply to carriers entering into contracts under section 8902 of title 5, United States Code. (2) Proposals.--Carriers may submit separate proposals relating to voluntary wellness program offerings as part of the annual call for benefit and rate proposals to the Office of Personnel Management. (3) Effective date.--This subsection shall take effect on the date of enactment of this Act and shall apply to contracts entered into under section 8902 of title 5, United States Code, that take effect with respect to calendar years that begin more than 1 year after that date. (e) State Demonstration Project.--Subpart 1 of part B of title XXVII of the Public Health Service Act (42 U.S.C. 300gg-41 et seq.) is amended by adding at the end the following: ``SEC. 2746. WELLNESS PROGRAM DEMONSTRATION PROJECT. ``(a) In General.--Not later than July 1, 2014, the Secretary of Health and Human Services, in consultation with the Secretary of the Treasury, shall establish a 10-State demonstration project under which participating States shall apply the provisions of 9802(h) of the Internal Revenue Code of 1986 to programs of health promotion offered by a health insurance issuer that offers health insurance coverage in the individual market in such State. ``(b) Expansion of Demonstration Project.--If the Secretary of Health and Human Services, in consultation with the Secretary of the Treasury, determines that the demonstration project described in subsection (a) is effective, such Secretaries may, beginning on July 1, 2017, expand such demonstration project to include additional participating States. ``(c) Requirements.--States that participate in the demonstration project under this section shall-- ``(1) ensure that requirements of consumer protection are met in programs of health promotion in the individual market; ``(2) require verification from health insurance issuers that offer health insurance coverage in the individual market of such State that premium discounts-- ``(A) do not create undue burdens for individuals insured in the individual market; ``(B) do not lead to cost shifting; and ``(C) are not a subterfuge for discrimination; and ``(3) ensure that consumer data is protected in accordance with the requirements of section 264(c) of the Health Insurance Portability and Accountability Act of 1996. ``(d) Existing Programs of Health Promotion or Disease Prevention.--Nothing in this section shall preempt any State law related to programs of health promotion offered by a health insurance issuer that offers health insurance coverage in the individual market in such State that was established or adopted by State law on or after the date of enactment of the BE WELL Act. ``(e) Regulations.--The Secretaries of Health and Human Services and the Treasury may promulgate regulations, as appropriate, to carry out this section.''. (f) Report.-- (1) In general.--Not later than 3 years after the date of enactment of this Act, the Secretary of Health and Human Services, in consultation with the Secretary of the Treasury and the Secretary of Labor, shall submit a report to the appropriate committees of Congress concerning-- (A) the effectiveness of wellness programs (as defined in section 9802(h)(2) of the Internal Revenue Code of 1986, as added by subsection (a)) in promoting health and preventing disease; (B) the impact of such wellness programs on the access to care and affordability of coverage for participants and non-participants of such programs; (C) the impact of premium-based and cost-sharing incentives on participant behavior and the role of such programs in changing behavior; and (D) the effectiveness of different types of rewards. (2) Data collection.--In preparing the report described in paragraph (1), the Secretaries shall gather relevant information from employers who provide employees with access to wellness programs, including State and Federal agencies.
summary: Building Efforts for Wellness and Encouraging Longer Lives Act or the BE WELL Act - Amends the Internal Revenue Code to establish standards for programs of health promotion and disease prevention (wellness programs), including a system of rewards and reimbursements for voluntarily adopting healthy behaviors, including participation in fitness and smoking cessation programs. Applies such standards to group plans under the Public Health Service Act and federal employee health benefit plans. Amends the Public Health Service Act to require the Secretary of Health and Human Services (HHS) to establish a 10-state demonstration project to apply wellness program standards to state health insurance plans.