Thursday, August 22, 2013

New Health Care Law Will Change Employee Wellness Programs

In an era of rising health care costs, many employers are turning to employee wellness programs to keep their workers healthy and to keep health insurance coverage costs down. According to the National Compensation Survey conducted by the U.S. Bureau of Labor Statistics, more than half of all employees have access to some sort of wellness program benefit; programs range from discounts at local fitness facilities and educational programs to comprehensive, closely-monitored programs designed to help employees better manage chronic conditions like diabetes or make significant lifestyle changes such as quitting smoking. In exchange for undergoing screenings and meeting other goals, employees also often receive discounts on their health care coverage premiums.

While employee wellness programs are popular, some experts question their value. Because participation is voluntary and companies are prohibited by law from discriminating against employees on the basis of health screening results and their participation in wellness programs, experts point out that employees may be less than truthful (“I quit smoking!” “I go to the gym four times a week!”) to qualify for the discounts, and that the result is often higher costs to employers with few measurable benefits. However, federal lawmakers disagree with the notion that the programs are not effective — to the point that significant provisions for employee wellness programs were included in the Patient Protection and Affordable Care Act passed in 2010.

Health Insurance Discounts


One of the primary reasons that employees opt to participate in their employers’ wellness programs is that participation often translates to discounts on health insurance premiums. With the cost of coverage going up every year, especially when an employee is paying for coverage for the whole family, voluntarily participating in the employee wellness program and agreeing to engage in healthy behaviors usually means at least a small break on the cost of health insurance.

However, businesses are limited as to how much of a discount they can offer. Under federal law, the maximum discount for signing up for an employee wellness benefit is 20 percent. Employers recoup those costs in the form of fewer health care claims and an overall lower cost for their organization, as insurance carriers give their best rates to their healthiest customers.

Realizing that the bigger the incentive, the greater the participation, the government is increasing the maximum insurance discount to 30 percent for employee wellness participants, with the potential for discounts to reach 50 percent if the program is designed to help people stop smoking. At the same time, the law also allows employers to levy penalties of up to 30 percent of the cost of health coverage should employee participants fail to meet the specific health standards established by the insurer, or for engaging in unhealthy behaviors like smoking. The law does account for employees who cannot participate in wellness programs for documented reasons by allowing them to meet different health standards or participate in alternative programs.


Grants for Wellness Programs


While the majority of larger employers — those with more than 100 employees — offer some type of employee wellness program, many smaller businesses cannot afford the costs associated with managing such a program (on average, about $150 per employee per year). The PPACA aims to help smaller employers develop wellness programs by establishing a $200 million grant program designed to pay for the costs associated with employee wellness. Employers with fewer than 100 employees implementing programs that meet certain criteria (for example, making efforts to improve employee engagement and create a healthy environment) can apply for the funding. These grants will not only improve the availability of employee wellness programs, but the money will create opportunities for public health professionals, as most small businesses do not have the resources to maintain a wellness specialist on staff. (Click here for additional resources on online MPH degree programs and opportunities in the public health field). 


CDC Support


In addition to increased funding, employers can expect additional support from the Centers for Disease Control and Prevention in their efforts to get employees healthy. Under the Affordable Health Care Act, employers of all sizes will have access to the CDC’s tools to analyze, evaluate and measure their wellness efforts. These tools will help employers more effectively manage their programs and maximize their cost savings.

The PPACA will completely change the face of health care in the U.S., including the way employers manage their employee wellness programs. Programs will vary by employer, but expect to see a great deal more attention paid to these popular employee benefits.


About the Author: After earning a master’s in public health, Lara Mack went on to serve as the director of employee wellness for a large financial services provider.



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