Federal Agencies Suspend Enforcement of Back-Pay Requirement for Employee Wellness Incentive Programs

NewsData.io · United States · Sep 3, 2026

The U.S. Departments of Labor, Health and Human Services, and Treasury announced on August 26, 2026, that they will not enforce requirements for plans to retroactively pay wellness incentive rewards when employees complete a reasonable alternative standard mid-year. The guidance directly affects employer-sponsored health-contingent wellness programs — including tobacco surcharge programs — eliminating the obligation to refund surcharges paid before an employee completes a cessation program. The agencies also clarified that employers are not required to disclose reasonable alternative standards when plan materials only indicate a program is available without detailing its terms. This resolves long-standing uncertainty that had generated numerous class-action lawsuits against employers.