How Do Employee Wellness Plans Factor in Obamacare?
Long gone are the days of smoking cigarettes in the break room and a quick cocktail at lunch…..Corporate employee wellness plans are becoming wildly popular among many organizations as their overall goal is to create a corporate culture of health, while increasing productivity and employee morale. Most importantly their main goal is to prevent large unnecessary claims, therefore reducing overall health care spend.
ObamaCare set out to expand on these wellness programs that were originally in effect under the Health Insurance Portability and Accountability Act (HIPPA). Though the Affordable Care Act (ACA) would give employers more flexibility and resources in implementing these wellness programs, has it offered employers enough incentive to invest in corporate wellness?
How the Affordable Care Act Incentivized Coporate Wellness
Obamacare split up workplace wellness guidelines into two categories. The first and most commonly used in today’s workplace is “participatory wellness programs”. These give employees rewards for participating in a wellness program, without having to obtain a certain outcome. Examples may include rewarding a gift card for completing an online health risk assessment, reimbursing employees for a gym membership or giving an employee an hour of personal time off if they attend a health education seminar. The second category is “health contingent wellness programs” which would require an individual to meet a specific health standard in order to obtain a reward. This category allows employers to be a bit more ‘aggressive’ in their wellness offerings with the ability to gain more insight on claims utilization.
Sounds like a win-win for employer’s right, create a healthy workplace culture, make employees happy, increase productivity, decrease absenteeism and lower health care costs……… Not exactly, arguably this is not the case given some of the recent findings on well programs response.
Let’s start with participation. According to a survey completed by Gallup, more than 85% of large companies with 1,000 or more employees offered some type of workplace wellness program, sadly only 60% of their workers knew about it and even more disheartening, only 24% chose to participate. Either there was a breakdown in the means of communicating the availability of these programs to employees or they simply just don’t care enough to participate.
Are the New Incentives Enough to Drive Change?
The new Obamacare regulations impose a maximum financial incentive that a healthcare plan can offer for participation in a wellness program. The thresholds are 50% of the health plans premium for programs designed to prevent or reduce tobacco use and 30% of the premium for all other health contingent wellness programs. The maximum allowable incentive tied to such wellness programs used to be 20%. For example, if an employee met normal standards with a biometric screening they may be entitled to 30% of their monthly contribution to their health insurance premium back to them. The new thresholds sound like a lot, but if the majority of the monthly premium is paid by the employer the question is “is the associated reduction in employee contribution enough to make an employee engage”? Simply put, it appears the programs are just not rich enough to drive engagement.
Furthermore, numerous large group employers have recently been sued for discrimination under the Equal Employment Opprotunity Commission stating medical testing under health contingent programs is truly not voluntary but more pressurized and therefore in violation of the Americans with Disabilities Act. These lawsuits make it difficult to implement health contingent programs in the workplace and many employers argue that these more aggressive incentive laced programs are what is needed to really engage their employees and change lifestyle behaviors.
What's the ROI on Corporate Wellness?
Lastly we have to remind ourselves of the cost to offer workplace wellness. While the health insurance carriers offer some programs free of charge, the more in-depth programs that employers offer usually come with a hefty per employee charge making these programs a true investment for employers, with no clear return on investment
The choice to offer workplace wellness still remains in the hands of the employers. While there is much enthusiasm surrounding these programs and evidence to support their value, are the returns on investment worth it with the mounting difficulties surrounding the promotion and execution of them? The intent of ACA’s wellness initiatives was to help employers control health care spending, but are they enticing enough to drive the necessary participation for employers to see results?