A bill to codify and enhance existing regulations designed to encourage individuals to adopt healthy behaviors through voluntary participation in programs of health promotion and disease prevention.

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 , 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.