How Health Reform Legislation Will Affect Workplace Wellness Programs
Among the many provisions of the Patient Protection and Affordable Care Act of 2010 (also known as the Health Care Reform Act or ACA) were some that will affect workplace wellness programs. For the most part, a legally compliant wellness program can continue along as it is. However, as various provisions of the law take effect (a few have already been implemented), there are some changes or potential benefits you'll want to know about.
In brief, the new law will:
- Allow small businesses that do not currently have a workplace wellness program to apply for a federal grant to help them establish a comprehensive one. A small business is defined as one with 100 or fewer employees who work at least 25 hours per week. The application period is supposed to begin in 2011, though critics note that, so far, the existence of any application rules are so well-hidden that they might as well have been classified Top Secret. In any case, a total of $2 million is supposed to be available to companies nationwide beginning in fiscal year 2011, which starts in October.
- Raise the 20% cap on wellness discounts or surcharges to 30%, with the possibility (if the Department of Health and Human Services, the IRS, and the Department of Labor agree) of raising that cap to 50%. (If a wellness program offers a reward based on satisfying a health standard, then in addition to meeting various other requirements, the prior regulations limited the amount of the reward or penalty to 20% of the cost of the health care coverage, considering both the employer's and the employee's share of the premium.) The new provision is scheduled to take effect on January 1, 2014, though there have been indications that the government may pass regulations raising the incentive limits to 30% even sooner.
- Require the Department of Health and Human Services (DHHS) to establish a ten-state demonstration project by July 1, 2014. The objective will be to test the effectiveness of wellness programs and create a system whereby any discounts or surcharges on health coverage that the employer would normally offer to employees through the wellness program will instead be administered through the health insurer. After the results of this project are analyzed, it's possible the same model might be applied nationally.
- Prohibit wellness programs from requiring employees to disclose their possession of lawfully owned firearms or ammunition at home or on their property (for example, via the health risk assessments or HRAs). This provision is already in effect.
- Potentially improve the scope of wellness-related services offered by your health insurer. Group health plans and other health insurance issuers will need to report publicly on how their plan improves health outcomes through activities such as case management, the use of medical homes, and more; and on what wellness and health promotion activities it offers, such as smoking cessation, weight management, stress management, physical fitness, nutrition, heart disease prevention, healthy lifestyle support and diabetes prevention services. (However, "grandfathered" health plans -- that is, any that were in existence on March 23, 2010 -- will not need to prepare these reports.)
- Potentially raise participation levels in your wellness program, as the federal government develops a national health awareness program that, among other goals, is meant to educate the public about the importance of community and worksite wellness and health promotion programs.
- Require health plans to cover preventive services with no copayment paid by the employee. This goes into effect in 2018.
For more general information on the new health care reform law, see Nolo's free online article, Health Care Reform: What Employers and Employees Need to Know.