text: 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.
target: 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 (wellness programs), 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.
feat_title: 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.