Taking advantage of PPACA wellness provision by mapping out a plan
Final regulations for wellness programs under PPACA were released a few weeks ago. While not much has changed with these final rules from the previous drafts, it does give employers the stability to start mapping out 3-5 year wellness plans.
For the most part, discrimination is not allowed with contributions on employer based health plans except where wellness is concerned. PPACA now allows for employers to charge up to 30% more for employers who do not participate in programs or reach wellness goals; that 30% can be increased to 50% with regards to tobacco cessation. With rates and costs increasing due to fees and taxes, employers who usually shied away from goal-based wellness tactics now have to consider these plans as a way to provide premium savings to employees who are willing to earn them.
An employer can take advantage of these new wellness contributions through different types of plans; participatory or health contingent. For the employer who simply wants to dip their toe into wellness plans, they can offer premium discounts for employees who can show they received their annual physical or attended a company-sponsored wellness seminar. This would be considered a “participatory plan.” Participatory plans would include activities that any and all employees could complete fairly easily. The company does not need to invest much time or money, but still receives the benefit of premium differentials and promoting wellness to their employees.
Health contingent plans are a little more involved for both the employer and employee. There are two types of health contingent plans, activity-based and outcome-based. They could include programs or activities that employees need to participate in such as, walking clubs, biometric screenings, and weight loss programs. An activity-based program is one that is based on simply participating in the activity and earning the reward regardless of outcome. If an employer requires that employees fall within a certain level of biometric screening or hit weight loss goals, the plan then becomes an outcome- based wellness program. Both activity and outcome-based plans have a strict set of rules that the employer must adhere to. Health contingent wellness programs must provide individuals to qualify at least once a year, it must be designed to promote health or prevent disease. The reward must fall within the 30% or 50% guidelines and individuals must be permitted to achieve the reward through a reasonable alternative standard. (Notice of this standard and instructions for a physician’s waiver must be made available).
Employers have an opportunity to save money and promote the well-being of their employee base, but a wellness program should not be taken lightly. Employers need to take the time to look toward the future and how they want to progress with a corporate wellness effort this year and in years to come.
About the Author
Alyssa Martin is a Vice President at William Gallagher Associates providing effective decision-making and advanced problem-solving services to a number of national clients in the mid-sized to large markets. She also works with key WGA clients to assist their employees with their individual Medicare choices as they are approaching retirement.