Workplace wellness initiatives commonly use incentives or rewards to encourage healthier behaviors and reduce habits that may negatively affect employees’ well-being. When a wellness program is connected to a group health plan, it must follow the nondiscrimination requirements established under HIPAA. These rules permit employers to offer incentives, if the program adheres to specific conditions.

Under HIPAA, wellness programs fall into two main categories: participatory programs and health-contingent programs. Health-contingent programs require individuals to meet a health-related standard to earn a reward, whereas participatory programs do not impose such requirements. This distinction matters because participatory programs are not held to the same nondiscrimination criteria as health-contingent programs.

This overview explains the different types of workplace wellness programs and summarizes HIPAA’s rules regarding allowable incentives and rewards.

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