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Health reform gives wellness programs a boost

Tim Gould
by Tim Gould
April 2, 2010
2 minute read
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Here’s a trend that seems to be emerging after the passage of healthcare reform: Companies saying they’ll be cranking up their wellness programs as part of their cost-cutting initiatives.

The new law does offer opportunities to boost the number of companies that offer wellness programs, as well as the number of employees who participate in those programs. The bill also aims to make it easier for companies to track the effects of a wellness program and improve the program’s long-term results.
Programs that don’t depend on ‘health status’ factors
Employers that wish to implement a wellness program that doesn’t depend on specific “health status” factors of employees – (i.e., overall wellness, fitness and any underlying diseases or injuries), must make the program available to all “similarly situated” individuals.
Under the current healthcare reform bill, here’s a breakdown of what wellness programs can and can’t offer:

  • Can reimburse all – or part of – a fitness center’s membership cost
  • Can provide a diagnostic testing program that offer rewards for participation in the program – but not for results
  • Can encourage preventative care of a specific health condition
  • Can reimburse employees the costs of a smoking-cessation program – regardless of the results of the program, and
  • Can reward employees for attendance at periodic health-education seminars.

Programs that depend on ‘health status’ factors
Employers that wish to start wellness programs that depend on specific health factors must meet the following requirements under the reform bill:

  • Reward for wellness programs can’t exceed 30% of the premium cost of employee-only coverage if the employee is the only individual who is eligible to participate in the program (20% under current HIPAA regs)
  • When wellness programs are available to dependents, reward cannot exceed 30% of the premium cost of the dependent’s coverage (20% under current HIPAA regs)
  • Administrative agencies can reward wellness program participants up to 50% of the premium cost of coverage if they determine the increase is appropriate
  • All wellness programs must have a “reasonable” chance of improving participating individuals’ health or preventing disease (programs cannot be “overly burdensome,” used as a way to discriminate against employees based on health status factors or be “highly suspect” in terms of the method chosen to promote health and prevent disease)
  • Must give participants the chance to qualify for the reward at least once per year
  • Must offer a reasonable alternative standard to the wellness program if the program is “unreasonably difficult” because of an employee’s medical condition or because the program is “medically inadvisable.”

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