By now, most HR pros have heard about, and undoubtedly prepared for, the changes that need to be made regarding the Affordable Care Act.
The ACA and Wellness Plans
Though many executives are concerned about the costs associated with providing all employees with comprehensive health coverage, one oft overlooked money-saving aspect to ACA is the institution of wellness programs. Midland Health recently published a whitepaper on the subject titled, “New wellness rules could be better for your health than ever.” This informative whitepaper outlines the changes you can make to improve employees health, and subsequently reduce healthcare costs.
Unfortunately, the guidelines regarding savings for incentive-based wellness programs are somewhat unclear, and not entirely finished yet. The whitepaper does a good job of laying out the basics regarding ACA approved wellness programs. It seems if you encourage employees to live a healthy lifestyle with an incentive-based wellness plan, you can expect to see some savings.
The Department of Labor, Internal Revenue Service, and Department of Health and Human Services released the guidelines for what they call “health-contingent” wellness programs. Aside from saving money on insurance coverage, these wellness programs will vastly improve participating employees health, and in turn, reduce absenteeism, and help improve productivity. Here’s a quick and dirty outline of the guidelines put out by the government agencies.
Acceptable Wellness Plan Types
First of all, wellness plans have been divided into two acceptable types: Activity-only wellness plans require participants to engage in activity such as walking, or biking to work, in relation to a health-goal like weight loss. Outcome-based wellness plans work towards a certain goal or outcome, such as weight-loss, or blood-pressure reduction. Both types are accepted, and should be chosen based on the individual companies needs.
Annual Opportunity to Qualify
The health-contingent wellness plans must provide the opportunity to enroll at least once a year.
This was one of the more confusing guidelines to me, so I will just quote the guidelines written-out by Lawley Benefits directly; “Consistent with the ACA, the regulations increase the permissible reward for meeting a health related standard to 30 percent of the total cost of employee- only coverage (or 50 percent, if the program is designed to prevent or reduce tobacco use)”
The whitepaper defines what it calls “reasonable design,” as a wellness program designed to better participants health, and fight-off health issues. The plan has to be reasonable accessible, not overly difficult, and non-discriminatory.
Equal Accessibility and “Reasonable Alternatives”
Wellness plans must be accessible to all employees equally. For employees who cannot meet health requirements and standards, “reasonable alternatives” must be provided for them. There also must be adequate notifications of these alternatives for all employees to see.
The Final Say on ACA Approved Wellness Plans
Regulations regarding ACA approved wellness plans are certain to come, and changes will undoubtedly be made. In the mean time, hopefully this sheds some light on the types of wellness plans that the ACA will approve of. So HR pros, you’ve heard the benefits of wellness plans for years, now that there’ additional, ACA incentive to institute one, there’s never been a better time to create and implement a wellness plan if you haven’t already. It’s our job as HR pros to know about this stuff, so make sure to stay tuned, because there’s surely more to come.