Overview
Many employers offer wellness programs that tie financial incentives to completing activities or meeting health outcomes. Recent nondiscrimination guidance requires employers to provide reasonable alternative ways for employees with medical conditions to earn the same rewards. The change affects how incentives are designed, documented, and communicated to employees.
Key takeaways
- Employers must offer reasonable alternatives for employees who cannot meet activity or outcome targets.
- Design and documentation are critical to avoid unfair treatment or unintentional discrimination.
- Clear communication improves participation and helps measure program effectiveness.
How it works
Wellness incentives typically come in two forms: activity-based (complete a program or screening) and outcome-based (reach a biometric target). When an employee has a medical limitation, a reasonable alternative standard gives a different path to earn the same incentive, such as completing a health coaching plan instead of meeting a biometric goal.
Employers generally must document alternative standards, explain how employees qualify, and provide reasonable time frames for completion. Human resources and benefits teams often coordinate with medical or legal advisors to ensure alternatives comply with nondiscrimination requirements.
What it may cover (and what it may not)
Reasonable alternatives commonly include personalized coaching, completion of medically tailored programs, or physician-certified plans that address an employee’s condition. These alternatives should be achievable and substantively related to the wellness goal so the incentive retains its health-promoting purpose.
Programs should not require impossible outcomes or give preferential treatment to some employees. Employers should avoid designs that indirectly discourage participation or make alternatives harder to access than the original incentive.
Common mistakes to avoid
Failing to publish clear procedures for requesting an alternative is a frequent error; employees need an easy way to ask for accommodation. Another mistake is treating alternative participants differently in reward distribution or recordkeeping, which can create legal and morale issues.
Relying on a single outcome measure without offering tailored paths for people with chronic conditions also reduces fairness and may limit program effectiveness.
Questions to ask an agent
Ask whether your current wellness design includes documented alternative standards and how they are administered. For practical guidance on shaping or revising your program, see Workplace Wellness Programs and Employee Health.
Check whether your vendor or third‑party administrator has templates and tracking tools that meet nondiscrimination expectations; a helpful resource is Recent Changes in Workplace Wellness Program Regulations.
Consider compliance and communications support to maintain engagement and measure outcomes; for strategic ideas, review Transforming Employer-Sponsored Health Benefits.
Next steps
Inventory your existing wellness incentives and identify where reasonable alternatives are already available or missing. Update written policies to describe alternative processes and retain documentation of individual determinations.
Train managers and HR staff on consistent application and employee privacy. If you want personalized help to align your program with best practices, you can talk to an agent about options tailored to your workforce.
Frequently Asked Questions
Who qualifies for a reasonable alternative?
Employees with medical conditions or limitations that prevent them from meeting an activity or outcome target typically qualify when a physician or health professional documents the condition.
Must the alternative provide the same reward value?
Yes; an employer should offer the same incentive so employees using an alternative are not disadvantaged compared with those who meet the original standard.
Can employees be asked to provide medical documentation?
Employers may request appropriate documentation to determine eligibility, but they should handle medical information confidentially and in line with privacy rules.
How should employers communicate alternatives?
Publish clear instructions in employee benefits materials and provide a straightforward point of contact for requesting alternative standards.