As we approach next year’s continued implementation of the Patient Protection and Affordable Care Act (PPACA), which affects how and what type of health insurance employers will offer, many employers are beginning to explore the best plan for them.
One popular topic of discussion is wellness programs. The PPACA provision on wellness programs that rewards positive health outcomes is being expanded. Next year, employers will be able to provide even more incentives for employees participating in wellness programs, with the reward percentage changing from 20 to 30 percent of the cost of coverage.
“It’s not surprising that a significant change under the PPACA is one that encourages employers to promote and reward employees for healthy behaviors,” says Marty Hauser, CEO of SummaCare, Inc. “Employer-sponsored wellness programs are popular, and incentivizing employees to make better overall lifestyle and wellness choices can help to lower long-term health care costs. It is reasonable at a time when we are trying to make health care available to more consumers and also drive down overall health care costs.”
Smart Business spoke to Hauser about the new wellness aspect of the PPACA and what employers should consider to help encourage and promote a healthier workforce next year.
What types of wellness programs are eligible for the 30 percent reward?
Wellness programs are currently and will continue to be divided into two categories — participatory wellness programs and health-contingent wellness programs. Participatory wellness programs are not eligible for the 30 percent reward, while qualified health-contingent wellness programs are.
In general, participatory wellness programs account for the majority of wellness programs offered by employers. They are made available to most employees and do not offer a reward or request that the individual satisfy a health standard to receive a reward. Examples include a full- or partial-reimbursement to employees for fitness center membership and/or a program that rewards employees for attending free health education seminars or lectures.
Health-contingent wellness programs require the participant meet certain health measures to receive a reward. These rewards can include incentives such as a discount or rebate on monthly health insurance premiums; partial- to full-waiver of cost-sharing benefits, such as deductibles or copays; and/or other monetary or non-monetary incentives. An example could include a program where participants’ biometrics are measured regularly and rewards are based on meeting a health measure. Participants who don’t meet the health measure must take additional steps to get the reward.
What are the requirements of a health-contingent wellness program?
A qualifying health-contingent wellness program must meet five regulatory requirements. These requirements include:
• Frequency of opportunity to qualify. The program is offered to all similarly situated employees.
• Size of reward. This could be as high as 30 percent of the cost of health coverage and up to as much as 50 percent for programs meant to prevent/reduce tobacco use.
• Uniform availability and reasonable alternative standards. The program is designed to be available for everyone, with a reasonable alternative for those whose medical conditions don’t allow them to participate to the full health standard.
• Reasonable design. The program is designed with an overall goal to promote health and prevent disease.
• Notice of other means of qualifying for the reward. Those who qualify for a different means of obtaining a reward have the opportunity to do so.
These requirements are meant to protect the consumer and safeguard against unfair practices.
What should interested employers do?
Discuss your options with your health insurer, benefits consultant or broker to determine what type of program makes the most sense for your employee population, time, wellness staff and budget.
Marty Hauser is CEO at SummaCare, Inc. Reach him at [email protected]
Insights Health Care is brought to you by SummaCare, Inc.