Original article https://www.benefitspro.com

By Allen Greenberg

The IRS, in what would be a blow to employers, is proposing companies shouldn’t be allowed to count the cost of wellness programs in their health care plans under the Patient Protection and Affordable Care Act.

Should it be affirmed, the rule would force employers to spend more to meet the law’s minimum value provisions.

Wellness programs are a key part of the PPACA.

The law was written with the idea that more employers would put wellness programs in place or expand existing such programs to help improve the health of Americans and help control health care spending.

Specifically, the hope is that more employers might reimburse workers for the cost of fitness center membership, reward employees for attending a monthly, no-cost health education seminar; or that they reward employees who complete health risk assessments.

The proposed rules from the IRS, however, wouldn’t allow employers to consider the costs of wellness programs in establishing whether they’ve reached the government’s definition of “minimum coverage” under the ACA.

Only wellness programs designed to prevent smoking will qualify, the IRS said.

Under PPACA, a large employer must pay an excise tax penalty if it fails to provide minimum coverage for even one full-time employee, forcing that employee to get a tax credit to buy health insurance through one of the new insurance exchanges, or marketplaces.

Labor unions that worried some employers might try to skirt minimum health care coverage by including wellness programs welcomed the news.

“We are very happy with the rules,” Dania Palanker, senior counsel for the National Women’s Law Center, told reporters.

But employer advocates were disappointed, calling it a setback.

The public has until July 2 to submit comments to the IRS for changes.

Click here to read the IRS’s proposed ruling.