Understanding what you can and cannot do with participation incentives with the enforcement of the Affordable Health Care Act can be a slippery slope if you are not well informed. The Departments of Health and Human Services, Labor, and the Treasury have revised the rules on wellness programs to reflect the changes and clarifications to the existing health and wellness provisions made by the health care law. What does that mean to you? Simple. It is more important than ever, to understand what changes have taken place (and stay current) when developing and revising a health and wellness program in group health coverage. Is it been appropriately designed, and does it protect your participants?
These discounts represent two significant differences from most wellness incentives once offered by employers and health plans: the incentives are now focused on outcomes rather than participation, and the magnitude of the discount is much greater. Here are some rules to consider:
- Employers can offer discounts of up to 30 percent to employees who participate in employer-sponsored wellness programs, and a participant incentive can be up to 50 percent of the cost of the health coverage for programs designed to prevent or reduce tobacco use. This is good news for those of you whose participants are heavy smokers, or you are dealing with a large segment of smokers in your organization.
- If the wellness program ties reward to health participation benchmarks, such as attaining the desired blood pressure, cholesterol level, or body mass index (BMI), certain conditions must be met. Rewards for all goal-based wellness programs cannot exceed 30 percent of the cost of employee-only or family coverage through the plan.
- Goal-based wellness program’ s rewards cannot exceed more than 30 percent of the cost of employee-only or family coverage through the wellness plan.
- To qualify for an incentive, the eligible individuals should be able to achieve the reward at least on an annual basis.
- If a participant cannot satisfy the standard for that period due to unreasonable difficulty resulting from a medical condition or medical advisability, the program must offer reasonable alternative standards (or a waiver) for obtaining the reward.
It is important to protect consumers from unfair practices; regulations are in place to require health-contingent wellness programs to follow certain rules, including:
- Your programs must be reasonably designed to prevent disease or promote health. A wellness program is considered reasonably if the program offers a different, and reasonable means of qualifying for the incentive provided if the individual who does not meet the standard based on the measurement, test or screening. You don’t have to worry if your program is structured to accommodate all and is not overly burdensome for individuals and offers a reasonable chance of improving health or preventing disease for everyone.
- A reasonable alternative means of qualifying for an incentive offered will have to be made available to participants whose medical conditions make it unreasonably difficult, or for whom it is medically inadvisable, to meet the specified health-related standard you have set. Your programs must be reasonably designed to be available to all similarly situated individuals.
- Individuals that are not going to qualify for incentives need to be identified and must be given reasonable notice how to be eligible for the same incentive through other means. The participant notice has to be easy to understand to increase the likelihood that those who qualify for a different means of obtaining an incentive will know how and when to contact the plan or issuer to request it.
Whether you are a self-insured company or a health and wellness provider, there are published rules that specify the types of wellness programs you can offer and the standards you must adhere to. Go to the Health Law Guide for Business for more information and contact All Digital Rewards, the leader in health and wellness program management software at 866.415.7703 to avoid the common pitfalls in developing or changing a Health and Wellness Incentive Program.