Healthcare reform is bringing several changes to how employers administer healthcare benefits as well as their wellness programs in 2013. Here are a couple key items you need to know about how healthcare reform affects your wellness program.
Larger wellness incentives
The Affordable Care Act (ACA) creates new incentives for employers to build wellness programs in their workplace and encourage healthier habits.
The Department of Health and Human Services, the Department of Labor, and the Treasury Department released proposed rules for employer-based wellness program incentives, which apply to plan years beginning on or after January 1, 2014.
These rules increase caps on employee incentives for wellness programs. The proposed maximum financial incentive for outcome-based wellness programs which have metrics or specific goals would increase from 20 to 30 percent of the total cost of coverage (employee + employer). For wellness programs with a tobacco reduction element, the maximum incentive could be up to 50 percent of the cost of coverage. In other words, up to 50% of the total cost of coverage can be tied to outcome-based incentives, with 30% being specifically assigned to biometric standards. An additional 20% could be for tobacco-free standards (Source: Oswald Companies).
Note that these new rules for incentives do not apply to participation incentives. There are no limits on participation incentives for wellness programs (such as participating in an HRA, health club, etc.) and participation incentives do not count towards the caps for outcome-based incentives described above.
The rules also indicate that employers will need to provide “reasonable alternatives” to standards-based wellness programs for employees with medical conditions who may not be able to comply with the wellness program’s requirements. Additionally, the program must be designed to promote health or prevent disease, and everyone must be given a second (alternative) way to earn an outcomes-based incentive regardless of a previously required medical condition.
In the near future, more clarification will also be given surrounding physician verification restrictions, reasonable alternative expansions, reasonable program guidelines, and wellness program communication revisions and requirements.
More covered preventative care
As most organizations understand, preventative care is a crucial part of wellness and another important facet of the healthcare reform law provides several preventative care services fully covered by insurance companies, such as physicals, colonoscopies, mammograms, immunizations, cholesterol screenings, and more.
As part of a wellness approach, organizations should communicate these preventative care services to their employees. Employers should also better educate employees regarding what is covered under their current plan and encourage usage of those services, as most employees are probably unaware that all of these services are now covered.
Wellness emerging as a larger public health strategy
According to the Centers for Disease Control and Prevention (CDC), "worksite wellness programs will become part of a national public health strategy to address the increase in chronic diseases" under the Affordable Care Act (ACA).
Additionally, the CDC explains that the ACA is designed to address several prevention areas including community prevention, clinical prevention, public health infrastructure and training, and research and surveillance of workforce wellness.
Grants for small businesses to help start wellness programs
Under the ACA, employers with fewer than 100 employees who work 25 or more hours per week (on average) that did not have a workplace wellness program in place can become eligible for grants to help them start a wellness program, which includes health awareness programs and initiatives to change unhealthy behaviors and lifestyle choices.
Consumer-driven approaches likely in the clear for "affordability"
Finally, consumer-driven healthcare options such as high deductible plans and health savings accounts, continue to rise in popularity and show positive results. Study after study, including "The Consumer Health Mindset," just conducted by Aon Hewitt, The National Business Group on Health, and The Futures Company" reveal that employees' involvement in consumer driven health plans often results in positive health behavior changes. Consumer-driven health care is clearly becoming a critical element to enhancing employee wellness.
Employers who offer health savings accounts or similar plans may have concerns about whether these types of plans will meet the new affordability provisions under the ACA. While it depends on your specific plan, and you should seek consult from your attorney and/or broker, at this time, most sources are saying that the widespread majority of these plans meet the affordability standards, which is generally good news for consumer-driven health plans, and for their role in helping your organization meet its wellness objectives.
There are bound to be more developments with regard to how the ACA will affect your wellness strategies as the law unfolds and new rules are proposed, but generally, it seems that employers can anticipate some positive support from the government for their wellness initiatives in the workplace.
Please note that by providing you with research information that may be contained in this article, ERC is not providing a qualified legal opinion. As such, research information that ERC provides to its members should not be relied upon or considered a substitute for legal advice. The information that we provide is for general employer use and not necessarily for individual application.
ERC's Preferred Partner, University Hospitals, provides ERC members with a 10% discount on wellness program services including onsite health screenings, health risk assessments, strategic wellness consulting, flu/pneumonia vaccinations, health fairs, and health seminars.