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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3468 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 3468

 To amend the Internal Revenue Code of 1986, the Public Health Service 
Act, and the Employee Retirement Income Security Act of 1974 to promote 
              the use of prevention and wellness programs.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             July 31, 2009

Mr. Castle (for himself, Mr. Gerlach, and Mr. LoBiondo) introduced the 
   following bill; which was referred to the Committee on Energy and 
   Commerce, and in addition to the Committees on Ways and Means and 
Education and Labor, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL

 
 To amend the Internal Revenue Code of 1986, the Public Health Service 
Act, and the Employee Retirement Income Security Act of 1974 to promote 
              the use of prevention and wellness programs.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Promoting Health and Preventing 
Chronic Disease through Prevention and Wellness Programs for Employees, 
Communities, and Individuals Act of 2009''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) Keeping people healthy and preventing disease must be 
        an important part of improving our federal health system.
            (2) More than 133 million Americans, which accounts for 45 
        percent of the U.S. population, have at least one chronic 
        condition.
            (3) With the growth in obesity, especially among younger 
        Americans, the diagnosis of childhood chronic diseases has 
        almost quadrupled over the past four decades and is expected to 
        continue to rise.
            (4) Chronic diseases are the leading causes of preventable 
        death and disability in the United States, accounting for 7 out 
        of every 10 deaths and killing more than 1,700,000 people in 
        the United States every year.
            (5) Two-thirds of the increase in health care spending is 
        due to increased prevalence of treated chronic disease.
            (6) Seventy-five percent of the nation's aggregate health 
        care spending is on treating patients with chronic disease, and 
        the vast majority of these diseases are preventable. 
        Unfortunately, less than one percent of total health care 
        spending goes toward prevention.
            (7) According to a recent study, treatment of the seven 
        most common chronic diseases, coupled with productivity losses, 
        cost the U.S. economy more than $1 trillion dollars annually. 
        It has been estimated that modest reductions in unhealthy 
        behaviors could prevent or delay 40 million cases of chronic 
        illness per year.
            (8) Chronic diseases are burdensome to American businesses. 
        Not only does a sicker American workforce have higher health 
        care costs, but it is also less productive. Chronic illnesses 
        lead to absenteeism and decreased effectiveness while at work 
        due to illness.
            (9) Prevention not only saves lives, it is highly cost-
        effective. One study concluded that an investment of $10 per 
        person per year in proven community-based programs to increase 
        physical activity, improve nutrition, and prevent smoking and 
        other tobacco use could save the country more than $16 billion 
        annually within five years. This is a return of $5.60 for every 
        $1 spent.

SEC. 3. TAX CREDIT TO EMPLOYERS FOR COSTS OF IMPLEMENTING PREVENTION 
              AND WELLNESS PROGRAMS.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business related 
credits) is amended by adding at the end the following:

``SEC. 45R. PREVENTION AND WELLNESS PROGRAM CREDIT.

    ``(a) Allowance of Credit.--
            ``(1) In general.--For purposes of section 38, the 
        prevention and wellness credit determined under this section 
        for any taxable year during the credit period with respect to 
        an employer is an amount equal to 50 percent of the costs paid 
        or incurred by the employer in connection with a qualified 
        prevention and wellness during the taxable year. For purposes 
        of the preceding sentence, in the case of any qualified 
        prevention and wellness offered as part of an employer-provided 
        group health plan, including health insurance offered in 
        connection with such plan, only costs attributable to the 
        qualified prevention and wellness and not to the group health 
        plan or health insurance coverage may be taken into account.    
          
            ``(2) Limitation.--The amount of credit allowed under 
        paragraph (1) for any taxable year shall not exceed the sum 
        of--
                    ``(A) the product of $200 and the number of 
                employees of the employer not in excess of 200 
                employees, plus
                    ``(B) the product of $100 and the number of 
                employees of the employer in excess of 200 employees.
    ``(b) Qualified Prevention and Wellness.--For purposes of this 
section--
            ``(1) Qualified prevention and wellness.--The term 
        `qualified prevention and wellness' means a program which--
                    ``(A) consists of any 3 of the prevention and 
                wellness components described in subsection (c), and
                    ``(B) which is certified by the Secretary of Health 
                and Human Services, in coordination with the Director 
                of the Center for Disease Control and Prevention, as a 
                qualified prevention and wellness under this section.
            ``(2) Programs must be consistent with research and best 
        practices.--
                    ``(A) In general.--The Secretary of Health and 
                Human Services shall not certify a program as a 
                qualified prevention and wellness unless the program--
                            ``(i) is consistent with evidence-based 
                        research and best practices, as identified by 
                        persons with expertise in employer health 
                        promotion and prevention and wellnesss,
                            ``(ii) includes multiple, evidence-based 
                        strategies which are based on the existing and 
                        emerging research and careful scientific 
                        reviews, including the Guide to Community 
                        Preventive Services, the Guide to Clinical 
                        Preventive Services, and the National Registry 
                        for Effective Programs, and
                            ``(iii) includes strategies which focus on 
                        employee populations with a disproportionate 
                        burden of health problems.
                    ``(B) Periodic updating and review.--The Secretary 
                of Health and Human Services shall establish procedures 
                for periodic review of programs under this subsection. 
                Such procedures shall require revisions of programs if 
                necessary to ensure compliance with the requirements of 
                this section and require updating of the programs to 
                the extent the Secretary, in coordination with the 
                Director of the Centers for Disease Control and 
                Prevention, determines necessary to reflect new 
                scientific findings.
            ``(3) Health literacy.--The Secretary of Health and Human 
        Services shall, as part of the certification process, encourage 
        employees to make the programs culturally competent and to meet 
        the health literacy needs of the employees covered by the 
        programs.
    ``(c) Prevention and Wellness Program Components.--For purposes of 
this section, the prevention and wellness components described in this 
subsection are the following:
            ``(1) Health awareness component.--A health awareness 
        component which provides for the following:
                    ``(A) Health education.--The dissemination of 
                health information which addresses the specific needs 
                and health risks of employees.
                    ``(B) Health screenings.--The opportunity for 
                periodic screenings for health problems and referrals 
                for appropriate follow up measures.
            ``(2) Employee engagement component.--An employee 
        engagement component which provides for--
                    ``(A) the establishment of a committee to actively 
                engage employees in worksite prevention and wellnesss 
                through worksite assessments and program planning, 
                delivery, evaluation, and improvement efforts, and
                    ``(B) the tracking of employee participation.
            ``(3) Behavioral change component.--A behavioral change 
        component which provides for altering employee lifestyles to 
        encourage healthy living through counseling, seminars, on-line 
        programs, or self-help materials which provide technical 
        assistance and problem solving skills. Such component may 
        include programs relating to--
                    ``(A) tobacco use,
                    ``(B) obesity,
                    ``(C) stress management,
                    ``(D) physical fitness,
                    ``(E) nutrition,
                    ``(F) substance abuse,
                    ``(G) depression, and
                    ``(H) mental health promotion (including anxiety).
            ``(4) Supportive environment component.--A supportive 
        environment component which includes the following:
                    ``(A) On-site policies.--Policies and services at 
                the worksite which promote a healthy lifestyle, 
                including policies relating to--
                            ``(i) tobacco use at the worksite,
                            ``(ii) the nutrition of food available at 
                        the worksite through cafeterias and vending 
                        options,
                            ``(iii) minimizing stress and promoting 
                        positive mental health in the workplace,
                            ``(iv) where applicable, accessible and 
                        attractive stairs, and
                            ``(v) the encouragement of physical 
                        activity before, during, and after work hours.
                    ``(B) Participation incentives.--
                            ``(i) In general.--Qualified incentive 
                        benefits for each employee who participates in 
                        the health screenings described in paragraph 
                        (1)(B) or the behavioral change programs 
                        described in paragraph (3).
                            ``(ii) Qualified incentive benefit.--For 
                        purposes of clause (i), the term `qualified 
                        incentive benefit' means any benefit which is 
                        approved by the Secretary of Health and Human 
                        Services, in coordination with the Director of 
                        the Centers for Disease Control and Prevention.
                    ``(C) Employee input.--The opportunity for 
                employees to participate in the management of any 
                qualified prevention and wellness to which this section 
                applies.
    ``(d) Participation Requirement.--
            ``(1) In general.--No credit shall be allowed under 
        subsection (a) unless the Secretary of Health and Human 
        Services, in coordination with the Director of the Centers for 
        Disease Control and Prevention, certifies, as a part of any 
        certification described in subsection (b), that each prevention 
        and wellness component of the qualified prevention and wellness 
        applies to all qualified employees of the employer. The 
        Secretary of Health and Human Services shall prescribe rules 
        under which an employer shall not be treated as failing to meet 
        the requirements of this subsection merely because the employer 
        provides specialized programs for employees with specific 
        health needs or unusual employment requirements or provides a 
        pilot program to test new wellness strategies.
            ``(2) Qualified employee.--For purposes of paragraph (1), 
        the term `qualified employee' means--
                    ``(A) for employers offering health insurance 
                coverage, an employee who is eligible for such 
                coverage, or
                    ``(B) for employers not offering health insurance 
                coverage, an employee who works an average of not less 
                than 25 hours per week during the taxable year.
    ``(e) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Employee and employer.--
                    ``(A) Partners and partnerships.--The term 
                `employee' includes a partner and the term `employer' 
                includes a partnership.
                    ``(B) Certain rules to apply.--Rules similar to the 
                rules of section 52 shall apply.
            ``(2) Certain costs not included.--Costs paid or incurred 
        by an employer for food or health insurance shall not be taken 
        into account under subsection (a).
            ``(3) No credit where grant awarded.--No credit shall be 
        allowable under subsection (a) with respect to any qualified 
        prevention and wellness of any taxpayer (other than an eligible 
        employer described in subsection (f)(2)(A)) who receives a 
        grant provided by the United States, a State, or a political 
        subdivision of a State for use in connection with such program. 
        The Secretary shall prescribe rules providing for the waiver of 
        this paragraph with respect to any grant which does not 
        constitute a significant portion of the funding for the 
        qualified prevention and wellness.
            ``(4) Credit period.--
                    ``(A) In general.--The term `credit period' means 
                the period of 10 consecutive taxable years beginning 
                with the taxable year in which the qualified prevention 
                and wellness is first certified under this section.
                    ``(B) Special rule for existing programs.--In the 
                case of an employer (or predecessor) which operates a 
                prevention and wellness for its employees on the date 
                of the enactment of this section, subparagraph (A) 
                shall be applied by substituting `3 consecutive taxable 
                years' for `10 consecutive taxable years'. The 
                Secretary shall prescribe rules under which this 
                subsection shall not apply if an employer is required 
                to make substantial modifications in the existing 
                prevention and wellness in order to qualify such 
                program for certification as a qualified prevention and 
                wellness.
                    ``(C) Controlled groups.--For purposes of this 
                paragraph, all persons treated as a single employer 
                under subsection (b), (c), (m), or (o) of section 414 
                shall be treated as a single employer.
    ``(f) Portion of Credit Made Refundable.--
            ``(1) In general.--In the case of an eligible employer of 
        an employee, the aggregate credits allowed to a taxpayer under 
        subpart C shall be increased by the lesser of--
                    ``(A) the credit which would be allowed under this 
                section without regard to this subsection and the 
                limitation under section 38(c), or
                    ``(B) the amount by which the aggregate amount of 
                credits allowed by this subpart (determined without 
                regard to this subsection) would increase if the 
                limitation imposed by section 38(c) for any taxable 
                year were increased by the amount of employer payroll 
                taxes imposed on the taxpayer during the calendar year 
                in which the taxable year begins.
        The amount of the credit allowed under this subsection shall 
        not be treated as a credit allowed under this subpart and shall 
        reduce the amount of the credit otherwise allowable under 
        subsection (a) without regard to section 38(c).
            ``(2) Eligible employer.--For purposes of this subsection, 
        the term `eligible employer' means an employer which is--
                    ``(A) a State or political subdivision thereof, the 
                District of Columbia, a possession of the United 
                States, or an agency or instrumentality of any of the 
                foregoing, or
                    ``(B) any organization described in section 501(c) 
                of the Internal Revenue Code of 1986 which is exempt 
                from taxation under section 501(a) of such Code.
            ``(3) Employer payroll taxes.--For purposes of this 
        subsection--
                    ``(A) In general.--The term `employer payroll 
                taxes' means the taxes imposed by--
                            ``(i) section 3111(b), and
                            ``(ii) sections 3211(a) and 3221(a) 
                        (determined at a rate equal to the rate under 
                        section 3111(b)).
                    ``(B) Special rule.--A rule similar to the rule of 
                section 24(d)(2)(C) shall apply for purposes of 
                subparagraph (A).
    ``(g) Termination.--This section shall not apply to any amount paid 
or incurred after December 31, 2017.''.
    (b) Treatment as General Business Credit.--Subsection (b) of 
section 38 of the Internal Revenue Code of 1986 (relating to general 
business credit) is amended by striking ``plus'' at the end of 
paragraph (34), by striking the period at the end of paragraph (35) and 
inserting ``, plus'', and by adding at the end the following:
            ``(36) the prevention and wellness credit determined under 
        section 45R.''.
    (c) Denial of Double Benefit.--Section 280C of the Internal Revenue 
Code of 1986 (relating to certain expenses for which credits are 
allowable) is amended by adding at the end the following new 
subsection:
    ``(g) Prevention and Wellness Program Credit.--
            ``(1) In general.--No deduction shall be allowed for that 
        portion of the costs paid or incurred for a qualified 
        prevention and wellness (within the meaning of section 45R) 
        allowable as a deduction for the taxable year which is equal to 
        the amount of the credit allowable for the taxable year under 
        section 45R.
            ``(2) Similar rule where taxpayer capitalizes rather than 
        deducts expenses.--If--
                    ``(A) the amount of the credit determined for the 
                taxable year under section 45R, exceeds
                    ``(B) the amount allowable as a deduction for such 
                taxable year for a qualified prevention and wellness,
        the amount chargeable to capital account for the taxable year 
        for such expenses shall be reduced by the amount of such 
        excess.
            ``(3) Controlled groups.--In the case of a corporation 
        which is a member of a controlled group of corporations (within 
        the meaning of section 41(f)(5)) or a trade or business which 
        is treated as being under common control with other trades or 
        business (within the meaning of section 41(f)(1)(B)), this 
        subsection shall be applied under rules prescribed by the 
        Secretary similar to the rules applicable under subparagraphs 
        (A) and (B) of section 41(f)(1).''.
    (d) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following:

``Sec. 45R. Prevention and wellness program credit.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2009.
    (f) Outreach.--
            (1) In general.--The Secretary of the Treasury, in 
        conjunction with the Director of the Centers for Disease 
        Control and members of the business community, shall institute 
        an outreach program to inform businesses about the availability 
        of the prevention and wellness credit under section 45R of the 
        Internal Revenue Code of 1986 as well as to educate businesses 
        on how to develop programs according to recognized and 
        promising practices and on how to measure the success of 
        implemented programs.
            (2) Authorization of appropriations.--There are authorized 
        to be appropriated such sums as are necessary to carry out the 
        outreach program described in paragraph (1).

SEC. 4. GRANTS TO INCREASE PHYSICAL ACTIVITY AND EMOTIONAL WELLNESS, 
              IMPROVE NUTRITION, AND PROMOTE HEALTHY EATING BEHAVIORS.

    Part Q of title III of the Public Health Service Act (42 U.S.C. 
280h et seq.) is amended by striking section 399W and inserting the 
following:

``SEC. 399W. GRANTS TO INCREASE PHYSICAL ACTIVITY AND EMOTIONAL 
              WELLNESS, IMPROVE NUTRITION, AND PROMOTE HEALTHY EATING 
              BEHAVIORS AND HEALTHY LIVING.

    ``(a) Establishment.--
            ``(1) In general.--The Secretary, acting through the 
        Director of the Centers for Disease Control and Prevention and 
        in coordination with the Administrator of the Health Resources 
        and Services Administration, the Director of the Indian Health 
        Service, the Secretary of Education, the Secretary of 
        Agriculture, the Secretary of the Interior, the Director of the 
        National Institutes of Health, the Director of the Office of 
        Women's Health, and the heads of other appropriate agencies, 
        shall award competitive grants to eligible entities to plan and 
        implement prevention and wellness programs that promote health 
        and wellness and prevent chronic disease. Such grants may be 
        awarded to target at-risk populations including youth, health 
        disparity populations (as defined in section 485E(d)), and the 
        underserved.
            ``(2) Term.--The Secretary shall award grants under this 
        subsection for a period not to exceed 4 years.
    ``(b) Award of Grants.--An eligible entity desiring a grant under 
this section shall submit an application to the Secretary at such time, 
in such manner, and containing such information as the Secretary may 
require, including--
            ``(1) a plan describing a comprehensive program of 
        approaches to encourage healthy living, emotional wellness, 
        healthy eating behaviors, and healthy levels of physical 
        activity;
            ``(2) the manner in which the eligible entity will 
        coordinate with appropriate State and local authorities and 
        community-based organizations, including but not limited to--
                    ``(A) State and local educational agencies;
                    ``(B) departments of health;
                    ``(C) State directors of programs under section 17 
                of the Child Nutrition Act of 1966 (42 U.S.C. 1786); 
                and
                    ``(D) community-based organizations serving youth; 
                and
            ``(3) the manner in which the applicant will evaluate the 
        effectiveness of the program carried out under this section.
    ``(c) Coordination.--In awarding grants under this section, the 
Secretary shall ensure that the proposed programs show a history of 
addressing these issues, have program evaluations that show success, 
and are coordinated in substance and format with programs currently 
funded through other Federal agencies and operating within the 
community.
    ``(d) Eligible Entity.--In this section, the term `eligible entity' 
means--
            ``(1) a city, county, tribe, territory, or State;
            ``(2) a State educational agency;
            ``(3) a tribal educational agency;
            ``(4) a local educational agency;
            ``(5) a federally qualified health center (as defined in 
        section 1861(aa)(4) of the Social Security Act);
            ``(6) a rural health clinic;
            ``(7) a health department;
            ``(8) an Indian Health Service hospital or clinic;
            ``(9) an Indian tribal health facility;
            ``(10) an urban Indian facility;
            ``(11) any health provider;
            ``(12) an accredited university or college;
            ``(13) a youth serving organization;
            ``(14) a community-based organization; or
            ``(15) any other entity determined appropriate by the 
        Secretary.
    ``(e) Use of Funds.--An eligible entity that receives a grant under 
this section shall use the funds made available through the grant to 
plan and implement prevention and wellness programs that promote health 
and wellness and prevent chronic disease.
    ``(f) Matching Funds.--In awarding grants under subsection (a), the 
Secretary may give priority to eligible entities who provide matching 
contributions. Such non-Federal contributions may be cash or in-kind, 
fairly evaluated, including plant, equipment, training, curriculum, or 
a preexisting evaluation framework.
    ``(g) Technical Assistance.--The Secretary may set aside an amount 
not to exceed 10 percent of the total amount appropriated for a fiscal 
year under subsection (j) to permit the Director of the Centers for 
Disease Control and Prevention to provide grantees with technical 
support in the development, implementation, and evaluation of 
prevention and wellness programs under this section and to disseminate 
information about effective strategies and interventions in promoting 
health and wellness and preventing chronic disease.
    ``(h) Limitation on Administrative Costs.--An eligible entity 
awarded a grant under this section may not use more than 10 percent of 
funds awarded under such grant for administrative expenses.
    ``(i) Report.--Not later than 6 years after the date of enactment 
of this section the Director of the Centers for Disease Control and 
Prevention shall review the results of the grants awarded under this 
section and other related research and identify prevention and wellness 
programs that have demonstrated effectiveness in promoting health and 
wellness and preventing chronic disease. Such review shall include an 
identification of model curricula, best practices, and lessons learned, 
as well as recommendations for next steps to promote health and 
wellness and prevent chronic disease. Information derived from such 
review, including model prevention and wellness program curricula, 
shall be disseminated to the public.
    ``(j) Definition.--In this section, the term `prevention and 
wellness program' means a program that consists of a combination of 
activities that are designed to increase awareness, assess risks, 
educate, and promote voluntary behavior change to improve the health of 
an individual, modify his or her consumer health behavior, enhance his 
or her personal well-being and productivity, and prevent illness and 
injury.
    ``(k) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, $60,000,000 for fiscal year 
2010, and such sums as may be necessary for each of fiscal years 2011 
through 2014.''.

SEC. 5. PREVENTION AND WELLNESS PROGRAMS FOR INDIVIDUALS AND FAMILIES.

    (a) In General.--The Secretary of Health and Human Services shall 
encourage States to work with insurance companies on ways to promote 
and incentivize the participation of individuals and families in 
prevention and wellness programs, such as through insurance premium 
reductions.
    (b) Definition.--In this section, the term ``prevention and 
wellness program'' means a program that consists of a combination of 
activities that are designed to increase awareness, assess risks, 
educate, and promote voluntary behavior change to improve the health of 
an individual, modify his or her consumer health behavior, enhance his 
or her personal well-being and productivity, and prevent illness and 
injury.

SEC. 6. RECOGNIZING FOR WELLNESS PROGRAMS UNDER GROUP HEALTH PLANS.

    (a) Public Health Service Act.--Section 2702 of the Public Health 
Service Act (42 U.S.C. 300gg-1) is amended--
            (1) in subsection (b), by adding at the end the following 
        new paragraph:
            ``(4) Treatment of wellness programs.--Paragraph (1) shall 
        not be construed as permitting variation of premiums based on 
        adherence to or participation in reasonably designed programs 
        of health promotion and disease prevention, if such programs 
        exist and a group health plan (or health insurance coverage 
        offered in connection with such a plan) may establish premium 
        discounts or rebates for modifying otherwise applicable 
        copayments or deductibles in return for adherence to or 
        participation in such programs.''; and
            (2) by adding at the end the following new subsection:
    ``(g) Programs of Health Promotion or Disease Prevention.--
            ``(1) General provisions.--
                    ``(A) General rule.--For purposes of this section, 
                a program of health promotion or disease prevention 
                (referred to in this subsection as a `wellness 
                program') shall be a program that is designed to 
                promote health or prevent disease that meets the 
                applicable requirements of this subsection.
                    ``(B) No conditions based on health status 
                factor.--If none of the conditions for obtaining a 
                premium discount or rebate or other reward for 
                participation in a wellness program is based on an 
                individual satisfying a standard that is related to a 
                health status factor, such wellness program shall not 
                violate this section if participation in the program is 
                made available to all similarly situated individuals 
                and the requirements of paragraph (2) are complied 
                with.
                    ``(C) Conditions based on health status factor.--If 
                any of the conditions for obtaining a premium discount 
                or rebate or other reward for participation in a 
                wellness program is based on an individual satisfying a 
                standard that is related to a health status factor, 
                such wellness program shall not violate this section if 
                the requirements of paragraph (3) are complied with.
            ``(2) Wellness programs not subject to requirements.--If 
        none of the conditions for obtaining a premium discount or 
        rebate or other reward under a wellness program as described in 
        paragraph (1)(B) are based on an individual satisfying a 
        standard that is related to a health status factor (or if such 
        a wellness program does not provide such a reward), the 
        wellness program shall not violate this section if 
        participation in the program is made available to all similarly 
        situated individuals. The following programs shall not have to 
        comply with the requirements of paragraph (3) if participation 
        in the program is made available to all similarly situated 
        individuals:
                    ``(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 
                related to a health condition through the waiver of the 
                copayment or deductible requirement under an individual 
                or group health plan for the costs of certain items or 
                services related to a health condition (such as 
                prenatal care or well-baby visits).
                    ``(D) A program that reimburses individuals for the 
                costs of smoking cessation programs without regard to 
                whether the individual quits smoking.
                    ``(E) A program that provides a reward to 
                individuals for attending a periodic health education 
                seminar.
            ``(3) Wellness programs subject to requirements.--If any of 
        the conditions for obtaining a premium discount, rebate, or 
        reward under a wellness program as described in paragraph 
        (1)(C) is based on an individual satisfying a standard that is 
        related to a health status factor, the wellness program shall 
        not violate this section if the following requirements are 
        complied with:
                    ``(A) The reward for the wellness program, together 
                with the reward for other wellness programs with 
                respect to the plan that requires satisfaction of a 
                standard related to a health status factor, shall not 
                exceed 30 percent of the cost of employee-only coverage 
                under the plan. If, in addition to employees or 
                individuals, any class of dependents (such as spouses 
                or spouses and dependent children) may participate 
                fully in the wellness program, such reward shall not 
                exceed 30 percent of the cost of the coverage in which 
                an employee or individual 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 if the Secretaries determine 
                that such an increase is appropriate.
                    ``(B) The wellness program shall be reasonably 
                designed to promote health or prevent disease. A 
                program complies with the preceding sentence if the 
                program 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 status factor, and 
                is not highly suspect in the method chosen to promote 
                health or prevent disease. The plan or issuer shall 
                evaluate the program's reasonableness at least once per 
                year.
                    ``(C) The plan shall give individuals eligible for 
                the program the opportunity to qualify for the reward 
                under the program at least once each year.
                    ``(D) The full reward under the wellness program 
                shall be made available to all similarly situated 
                individuals. For such purpose, among other things:
                            ``(i) The reward is not available to all 
                        similarly situated individuals for a period 
                        unless the wellness program allows--
                                    ``(I) for 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) for 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.
                            ``(ii) If reasonable under the 
                        circumstances, the plan or issuer may seek 
                        verification, such as a statement from an 
                        individual's physician, that a health status 
                        factor makes it unreasonably difficult or 
                        medically inadvisable for the individual to 
                        satisfy or attempt to satisfy the otherwise 
                        applicable standard.
                    ``(E) The plan or issuer involved shall disclose in 
                all plan materials describing the terms of the wellness 
                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 disclose that such a program is 
                available, without describing its terms, the disclosure 
                under this subparagraph shall not be required.
            ``(4) Existing programs.--Nothing in this section shall 
        prohibit a program of health promotion or disease prevention 
        that was established prior to the date of enactment of this 
        subsection and applied with all applicable regulations, and 
        that is operating on such date, from continuing to be carried 
        out for as long as such regulations remain in effect.
            ``(5) Regulations.--Nothing in this section shall be 
        construed as prohibiting the Secretaries of Labor, Health and 
        Human Services, or the Treasury from promulgating regulations 
        in connection with this section.''.
    (b) Employee Retirement Income Security Act of 1974.--Section 702 
of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1182) 
is amended--
            (1) in subsection (b), by adding at the end the following 
        new paragraph:
            ``(4) Treatment of wellness programs.--Paragraph (1) shall 
        not be construed as permitting variation of premiums based on 
        adherence to or participation in reasonably designed programs 
        of health promotion and disease prevention, if such programs 
        exist and a group health plan (or health insurance coverage 
        offered in connection with such a plan) may establish premium 
        discounts or rebates for modifying otherwise applicable 
        copayments or deductibles in return for adherence to or 
        participation in such programs.''; and
            (2) by adding at the end the following new subsection:
    ``(g) Programs of Health Promotion or Disease Prevention.--
            ``(1) General provisions.--
                    ``(A) General rule.--For purposes of this section, 
                a program of health promotion or disease prevention 
                (referred to in this subsection as a `wellness 
                program') shall be a program that is designed to 
                promote health or prevent disease that meets the 
                applicable requirements of this subsection.
                    ``(B) No conditions based on health status 
                factor.--If none of the conditions for obtaining a 
                premium discount or rebate or other reward for 
                participation in a wellness program is based on an 
                individual satisfying a standard that is related to a 
                health status factor, such wellness program shall not 
                violate this section if participation in the program is 
                made available to all similarly situated individuals 
                and the requirements of paragraph (2) are complied 
                with.
                    ``(C) Conditions based on health status factor.--If 
                any of the conditions for obtaining a premium discount 
                or rebate or other reward for participation in a 
                wellness program is based on an individual satisfying a 
                standard that is related to a health status factor, 
                such wellness program shall not violate this section if 
                the requirements of paragraph (3) are complied with.
            ``(2) Wellness programs not subject to requirements.--If 
        none of the conditions for obtaining a premium discount or 
        rebate or other reward under a wellness program as described in 
        paragraph (1)(B) are based on an individual satisfying a 
        standard that is related to a health status factor (or if such 
        a wellness program does not provide such a reward), the 
        wellness program shall not violate this section if 
        participation in the program is made available to all similarly 
        situated individuals. The following programs shall not have to 
        comply with the requirements of paragraph (3) if participation 
        in the program is made available to all similarly situated 
        individuals:
                    ``(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 
                related to a health condition through the waiver of the 
                copayment or deductible requirement under an individual 
                or group health plan for the costs of certain items or 
                services related to a health condition (such as 
                prenatal care or well-baby visits).
                    ``(D) A program that reimburses individuals for the 
                costs of smoking cessation programs without regard to 
                whether the individual quits smoking.
                    ``(E) A program that provides a reward to 
                individuals for attending a periodic health education 
                seminar.
            ``(3) Wellness programs subject to requirements.--If any of 
        the conditions for obtaining a premium discount, rebate, or 
        reward under a wellness program as described in paragraph 
        (1)(C) is based on an individual satisfying a standard that is 
        related to a health status factor, the wellness program shall 
        not violate this section if the following requirements are 
        complied with:
                    ``(A) The reward for the wellness program, together 
                with the reward for other wellness programs with 
                respect to the plan that requires satisfaction of a 
                standard related to a health status factor, shall not 
                exceed 30 percent of the cost of employee-only coverage 
                under the plan. If, in addition to employees or 
                individuals, any class of dependents (such as spouses 
                or spouses and dependent children) may participate 
                fully in the wellness program, such reward shall not 
                exceed 30 percent of the cost of the coverage in which 
                an employee or individual 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 if the Secretaries determine 
                that such an increase is appropriate.
                    ``(B) The wellness program shall be reasonably 
                designed to promote health or prevent disease. A 
                program complies with the preceding sentence if the 
                program 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 status factor, and 
                is not highly suspect in the method chosen to promote 
                health or prevent disease. The plan or issuer shall 
                evaluate the program's reasonableness at least once per 
                year.
                    ``(C) The plan shall give individuals eligible for 
                the program the opportunity to qualify for the reward 
                under the program at least once each year.
                    ``(D) The full reward under the wellness program 
                shall be made available to all similarly situated 
                individuals. For such purpose, among other things:
                            ``(i) The reward is not available to all 
                        similarly situated individuals for a period 
                        unless the wellness program allows--
                                    ``(I) for 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) for 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.
                            ``(ii) If reasonable under the 
                        circumstances, the plan or issuer may seek 
                        verification, such as a statement from an 
                        individual's physician, that a health status 
                        factor makes it unreasonably difficult or 
                        medically inadvisable for the individual to 
                        satisfy or attempt to satisfy the otherwise 
                        applicable standard.
                    ``(E) The plan or issuer involved shall disclose in 
                all plan materials describing the terms of the wellness 
                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 disclose that such a program is 
                available, without describing its terms, the disclosure 
                under this subparagraph shall not be required.
            ``(4) Existing programs.--Nothing in this section shall 
        prohibit a program of health promotion or disease prevention 
        that was established prior to the date of enactment of this 
        subsection and applied with all applicable regulations, and 
        that is operating on such date, from continuing to be carried 
        out for as long as such regulations remain in effect.
            ``(5) Regulations.--Nothing in this section shall be 
        construed as prohibiting the Secretaries of Labor, Health and 
        Human Services, or the Treasury from promulgating regulations 
        in connection with this section.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to plan years occurring on or after the date of the enactment of 
this Act.
                                 <all>
```