New proposed federal regulations on wellness programs may deliver a healthy shot in the arm for employer-sponsored initiatives.
Just before Thanksgiving, the federal government released a flurry of guidance regarding the Patient Protection and Affordable Care Act (PPACA). One set of proposed rules defines the value of wellness program incentives. (For more on the other topics covered by the new guidance, please see the “In Brief” section in this newsletter).
The proposed rules would increase the maximum reward or penalty for wellness incentives from 20 percent of the total cost of the coverage to 30 percent beginning in 2014, according to a Kaiser Health News report. They also would increase the ceiling on rewards for tobacco cessation programs to 50 percent of the cost of coverage.
These richer incentives likely would encourage more employees to get involved in an employer-sponsored wellness initiative, according to Stephanie A. Mills, president and CEO of Franciscan Health and Wellness Services, Inc.
“Overall, for those of us who are supporting wellness programs, this is well in line with the best-practice approach,” Mills said in a recent HealthLeaders Media online report. “There are pros and cons, as there are with any new regulations . . . but at first glance it seems to be a positive for employers and individuals.”
Mills said the new rules clarify issues related to outcome-based incentives and give employers more flexibility.
“That will be very welcomed by employers and will drive participation,” Mills said. “It diminishes a lot of the anxiety that employers are feeling around discrimination and what sorts of limits should we have around the incentives and what parameters.”
Wellness initiatives have become popular tools in employers’ fight against rising health care costs. The 2012 United Benefit Advisors (UBA) Health Plan Survey found that 58 percent of large employers (1,000 or more employees) support wellness programs. While the prevalence of wellness programs among smaller employers is less significant, companies of all sizes are becoming more interested in the wellness trend, and employers should use the release of these rules to rethink (or start thinking about) their wellness strategies, Peter Freska of The LBL Group in Los Alamitos, Calif., noted in a recent UBA blog.
“As employers continue their efforts to develop wellness programs that make a difference, they will need to consider the different elements within their program,” Freska writes.
Freska notes the new tobacco cessation limits will be especially attractive for employers in light of the large health care costs associated with smoking.