(a) A health-contingent wellness program that requires an individual to perform or complete an activity related to a health factor in order to obtain a reward but does not require the individual to attain or maintain a specific health outcome is an activity-only wellness program.     
      (b) An activity-only 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 activity-only wellness program, coupled with the reward for other health-contingent wellness programs offered under the same 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 if the program includes a program designed to prevent or reduce tobacco use, except that no more than 20 percent of the reward may be attributable to the tobacco use program. However, if, in addition to employees or members, any class of dependents--such as spouses or spouses and dependent children--may participate in the activity-only 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 activity-only wellness program must meet the criteria set out in §21.4705 of this title. This determination is based on all the relevant facts and circumstances.       
        (3) Frequency of opportunity to qualify. The activity-only 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 activity-only wellness program must be available to all similarly situated individuals.                  (A) A reward under this section is available to all similarly situated individuals for a period so long as the program allows, at a minimum:                      (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 or other health status-related factor 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.                     (B) To the extent that a reasonable alternative standard under an activity-only wellness program is an activity-only wellness program, it must comply with the requirements of this subtitle in the same manner as if it were an initial program standard. To the extent that a reasonable alternative standard under an activity-only wellness program is an outcome-based wellness program, it must comply with the requirements of §21.4708 of this title.                   (C) If reasonable under the circumstances, a plan or issuer may seek verification, such as a statement from an individual's personal physician, that the medical condition or other health status-related factor makes it unreasonably difficult for the individual to satisfy or attempt to satisfy the otherwise applicable standard of an activity-only wellness program. Plans and issuers may seek verification with respect to requests for a reasonable alternative standard for which it is reasonable to determine that medical judgment is required to evaluate the validity of the request.         
        (5) Notice of availability of reasonable alternative standard. The health benefit plan or policy, or health benefit plan or policy issuer, must disclose, in all plan materials describing the terms of an activity-only wellness program, the availability of a reasonable alternative standard to qualify for the reward (and, if applicable, the possibility of waiver of the otherwise applicable standard required under paragraph (4) of this subsection), including contact information for obtaining a reasonable alternative standard and a statement that recommendations from an individual's personal physician will be accommodated. If plan materials merely mention that an alternative program is available, without describing its terms, this disclosure is not required.       
     Source Note:        The provisions of this §21.4707 adopted to be effective March 31, 2009, 34 TexReg 2135; amended to be effective July 22, 2015, 40 TexReg 4693