On Wednesday, the Departments of Labor, Treasury and Health and Human Services issued what are being called final rules on employment-based wellness programs, and on Thursday, advocacy groups weighed in on the changes, which were required under the Affordable Care Act.
Effective January 1, 2014, employers can charge workers as much as 30% of their medical plan premiums for failing to meet wellness incentive goals, up 10% from current levels. The regulations require a “reasonable alternative” be offered to employees.
“The final rules support workplace health promotion and prevention as a means to reduce the burden of chronic illness, improve health and limit growth of health care costs,” the Department of Labor said in its official statement, “while ensuring that individuals are protected from unfair underwriting practices that could otherwise reduce benefits based on health status….
“Today’s final rules ensure flexibility for employers by increasing the maximum reward that may be offered under appropriately designed wellness programs, including outcome-based programs. The final rules also protect consumers by requiring that health-contingent wellness programs be reasonably designed, are uniformly available to all similarly situated individuals and accommodate recommendations made at any time by an individual's physician, based on medical appropriateness.”
Steve Wojcik, vice president of public policy for the National Business Group on Health, tells EBN that, under the new rules, wellness programs “may not move the needle as much as you want” and could result in more work for employers.
“There was a lot of helpful clarification, and, for the most part, it’s as we expected,” Wojcik says. “The one big difference is you no longer need medical justification to opt out … to ask for that ‘reasonable alternative.’
“We don’t know how that’s going to play out, because we don’t know how many will willingly opt out,” which could result both in less effective programs, and way more time and effort for program managers.
Cara Woodson Welch, vice president of public policy, news and publications for WorldatWork, applauds the Obama administration for maintaining flexibility. Employers know best, she says, how to make such initiatives succeed in their work culture and setting.
“WorldatWork appreciates that the final rules for the most part refrain from establishing rigid requirements for wellness plans and instead will allow employers to determine the appropriate design for rewards employers deem will work best to incentivize their workforce,” Welch says.
Reports indicate that nearly half of American companies with more than 200 employees make used of wellness programs. The efficacy is largely undisputed, but reliably measurable results are hard to come by. An ACA-mandated study also released Wednesday reported small but promising changes at some 600 employers with workplace wellness efforts.
The Equal Employment Opportunity is currently examining whether tethering workers’ health care costs to their actual health violates anti-discrimination laws, and California’s legislature is considering a bill that would bar linking financial rewards to health status.
Still, Families USA applauded the latest guidance. Ron Pollack, the group’s executive director, says the rules will help protect consumers.
“These rules will help ensure that wellness programs are designed to actually promote wellness, and that they are not just used as a backdoor way to shift health care costs to those struggling with health problems,” Pollack says.
The Bloomberg News Service’s Alex Nussbaum contributed to this report. Read
