Affordable Care Act includes Wellness Incentives

As you may have read in previous posts, there are provisions of the Affordable Care Act (ACA) that have been delayed. However, the part of the law governing Wellness Programs are still scheduled to be effective as of January 01, 2014.

According to an article published by Hartford Business, these rules “will allow employers to offer more lucrative financial rewards to employees who improve their health.”

Affordable Care Act Provides Some Flexibility

“‘This gives employers flexibility to design wellness programs that align and reward employee behavior,’ said Mike Thompson, a principal with accounting and consulting firm PwC. “Employers incentivizing workers to change their health habits is an increasingly popular trend,” Thompson said. “Businesses are looking for ways to keep employees healthier to reduce healthcare costs and boost productivity by reducing absenteeism. Incentives range from cash rewards and gift cards to discounted insurance premiums or co-payments.”

“About 41 percent of U.S. companies with 200 or more workers offer some type of wellness program, while 10 percent of smaller firms offer them, according to a recent survey by the Kaiser Family Health Foundation.”

More Wellness Programs due to the Affordable Care Act?

“Now, experts say, wellness programs could become more widespread or aggressive under the ACA. Specifically, the health reform law raises the maximum discount employers can offer workers who meet certain health standards from 20 percent to 30 percent of the total cost of insurance coverage. In some cases, like wellness programs aimed at reducing or preventing tobacco use, discounts can go as high as 50 percent.”

Affordable Care Act includes Safeguards to Prevent Discrimination

“The ACA, however, also puts in safeguards to prevent discrimination, which has been a major concern of worker advocates. The law requires employers to offer a “reasonable alternative” to employees who are unable to meet certain health benchmarks due to some type of medical condition. Workers who are unable able to reach a normal body mass index, for example, could be offered an incentive to join a walking program. Many employers have shied away from wellness programs that penalize employees, opting to use participatory or voluntary programs instead. That could change under the ACA, experts say, now that there is more clarity on how to deal with workers who have medical conditions preventing them from meeting normal health standards. ‘These new limits give employers more leeway,’ Thompson said.”

“As employers contemplate adding wellness programs, however, there is a debate about return on investment. Financial savings, experts say, don’t churn out overnight, and there is a risk for companies that experience high employee turnover not to see a huge return. Paul Coppola, head of wellness program strategy and development at Hartford insurer Aetna, said it can take a firm three to five years to see a return on their investment in a wellness program, but there are short-term benefits. “Even in an organization with high turnover, it helps boost productivity right away and decreases health risk factors within the organization,” Coppola said. “Coppola said the Affordable Care Act likely will get companies to focus more on preventative services like weight loss and tobacco cessation programs.”

Does your employer offer a Wellness Program?  Do you participate?

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