Affordable Care Act Wellness Incentives
•
2 likes•607 views
Workplace wellness has been around since the 1960s but has taken 2 decades for companies to realize the benefits of providing wellness programs. The Affordable Care Act has expanded the potential for these programs to encourage employees to maintain healthy choices and aid in health care costs. Review how ACA has changed this benefit.
Recommended
Recommended
More Related Content
More from Infinisource
More from Infinisource (20)
Recently uploaded
Recently uploaded (20)
Affordable Care Act Wellness Incentives
- 1. ACA Wellness Incentives Wellness: A program of health promotion or disease prevention. Although workplace wellness was first introduced in the 1960s, it was two decades before corporations began to realize the benefits of providing wellness programs. The trend of adopting healthy lifestyles has continued and today almost 90% of U.S. employers offer wellness programs. The Affordable Care Act (ACA) expanded the potential for these programs to encourage healthy choices and reduce health care costs. Wellness incentive programs give participants rewards for meeting certain health-related goals, such as losing weight, receiving flu shots or meeting health requirements. Proposed rules, effective for plan years starting on or after January 1, 2014, would increase the maximum permissible health-contingent wellness reward from 20 percent to 30 percent of the cost of health coverage, and further increase that reward to as much as 50 percent for programs designed to prevent or reduce tobacco use. There are two types of wellness incentives: Participatory Not subject to the wellness requirements if participation is available to all similarly situated individuals Examples Fitness center membership reimbursement; diagnostic testing program rewards participation, not outcomes; copayment/deductible waiver for costs of services related to a health condition (e.g., prenatal care, well-baby visits); smoking cessation cost reimbursement; rewards for attending periodic health seminar Health-contingent Based on health factors, subject to the wellness requirements Examples Tobacco use surcharge for medical premium; reward based on reaching certain biometric standards (blood pressure, BMI, glucose level) Charlotte - Headquarters 13024 Ballantyne Corporate Place Suite 400 Charlotte, NC 28277 Toll Free: 800-300-3838 www.infinisource.com Coldwater 15 E. Washington Street PO Box 889 Coldwater, MI 49036 Toll Free: 800-300-3838 Fax: 517-278-0764 Sandy 9350 S. 150 E.PO Box 889 Suite 300 Sandy, UT 84070 Toll Free 800-733-8839 Fax 801-281-9545 One Source. Infinite Solutions.
- 2. ACA Wellness Incentives Employer cautions • Under the ADA, EEOC has said wellness programs must be voluntary (but has not defined voluntary). • Wellness penalties may jeopardize grandfathered status of medical plan. • Wellness programs are ERISA plans if they provide medical care benefits. Requirements for health factor-based wellness programs Frequency Individuals must have opportunity to qualify for reward at least annually • Amount: Reward must be no more than 20% of cost of coverage (30% for plan years starting on or after January 1, 2014, and up to 50% for programs designed to prevent or reduce tobacco use) • Availability: Reward must be uniformly available to similarly situated individuals and offer a reasonable alternative standard if unreasonably difficult to satisfy standard because of a medical condition »» Alternative standard does not need to be pre-designed »» If alternative standard is completion of education program, it must be employer paid »» If alternative standard is diet program, employer does not have to pay for food »» If alternative standard is not reasonable, follow doctor’s recommendations »» Plan can request doctor’s note • Reasonableness: Program must be reasonably designed to promote health or prevent disease • Notice: Program must disclose in all plan materials that alternative standards (or waivers) are available »» Regulations include several types of model language Charlotte - Headquarters 13024 Ballantyne Corporate Place Suite 400 Charlotte, NC 28277 Toll Free: 800-300-3838 www.infinisource.com Coldwater 15 E. Washington Street PO Box 889 Coldwater, MI 49036 Toll Free: 800-300-3838 Fax: 517-278-0764 Sandy 9350 S. 150 E.PO Box 889 Suite 300 Sandy, UT 84070 Toll Free 800-733-8839 Fax 801-281-9545 One Source. Infinite Solutions.
- 3. ACA Wellness Incentives Examples • Total annual group health plan premium cost is $5,000. Employer provides $250 reward for completing health risk assessment, $1,500 for meeting healthcontingent standard. Good incentive. Even though $1,750 is more than 30% of premium cost, you don’t count the $250 reward because it is participation based. • Employer offers reward for under 200 on cholesterol test. If not achieved, employer provides a different, reasonable means of qualifying for reward. Materials contain the appropriate alternative reasonable standard notice. Employee’s count is above 200. Employer’s nurse recommends diet and exercise routine that is not unreasonably difficult. After program, employee’s count is still above 200. Program requires him to visit a doctor and follow any additional doctor recommendations. Doctor prescribes medication and requires periodic evaluations. Employee qualifies for reward but only if he actually follows doctor’s advice. Good incentive. Gray areas • How to apportion financial rewards among family members where health goals may not be applicable to all of them (e.g., a spouse who smokes) • How to define tobacco use • How percentage limits apply to a financial reward whose amount may not be known initially (e.g., waiver of copayments) • Whether reasonable design requirement means you must use evidence- or practice-based standards Born in the baby-boomer era, workplace wellness has matured into a nationally accepted workforce offering. Participants become better educated and healthier consumers while both employers and participants save on costs. Wellness incentives have become a way of life to the benefit of us all. Charlotte - Headquarters 13024 Ballantyne Corporate Place Suite 400 Charlotte, NC 28277 Toll Free: 800-300-3838 www.infinisource.com Coldwater 15 E. Washington Street PO Box 889 Coldwater, MI 49036 Toll Free: 800-300-3838 Fax: 517-278-0764 Sandy 9350 S. 150 E.PO Box 889 Suite 300 Sandy, UT 84070 Toll Free 800-733-8839 Fax 801-281-9545 One Source. Infinite Solutions.