Dangling bigger incentives for workplace wellness programs

Got questions about the Affordable Care Act? WHYY/NewsWorks Health and Science Desk provides “The Short Answer.”

Question: Does the Affordable Care Act change workplace wellness programs?

Got questions about the Affordable Care Act? In a regular feature, the WHYY/NewsWorks Health and Science Desk is providing “The Short Answer.”

Today’s question

Does the Affordable Care Act (ACA) change workplace wellness programs?

The short answer

The health law ups the ante on the financial rewards that employers can dangle in front of workers.

More details

Healthy workers are cheaper workers. Companies spend less on employees who have their weight or blood pressure under control. Tiered-pricing for benefits plans — giving discounts to those who enroll — is an attempt to motivate healthier behavior. However it also shifts insurance costs on to employees unwilling to take steps toward a healthier lifestyle.

Employment-based wellness programs are nothing new, but the ACA makes two key changes:

1. In exchange for meeting health goals set by the company, workers could now save up to 30 percent (it used to be 20 percent) on health insurance costs such as premiums or deductibles. The discount could be even higher — up to 50 percent — for smokers who participate in quit smoking programs.

2. If a core wellness program is considered “unreasonably difficult” or “medically inadvisable” for a particular worker, a company has to provide an alternative. For instance, for someone who unable to participate in a running program, a walking program might be offered.

Two kinds of programs

The health law rules address two types of wellness programs — each in different ways:

Participatory programs are open to all workers and don’t require them to meet a health-related standard. Examples include an education class or completing a health survey.

Health-contingent programs offer rewards to people who meet a company set health goal, perhaps lowering cholesterol level or achieving a certain body mass index (BMI).

Is tiered pricing fair?

When the health law was first adopted, some people worried that wellness incentive programs would become a way to weed out unhealthy people, or discriminate against people with preexisting conditions. Critics feared companies would say: “Hey, we offered you a walking program at lunch, if you can’t hack it, too bad, no reward for you.”

To address that, the new rules are supposed to make sure that workplace wellness programs give all people a chance to earn discounts. You might call it a “separate-but-equal” opportunity to meet health goals — and avoid financial penalties. For incentive programs based on company-set goals, workers can consult with their physician to design a medically appropriate program.

Do wellness programs work?

Experts track the success of wellness programs two ways: One, do they make workers healthier? Two, do they help companies drive down health costs? The evidence is mixed for both yardsticks, largely because participation in these programs can be very low.

The average worker doesn’t know that the slim, healthy guy in the next cubicle is getting a big discount on his premiums. Busy workers often don’t sign up for the health-based rewards — and end up paying more because they are not paying attention.

Despite the mixed evidence on their ability to reduce health care spending, lots of companies believe in workplace wellness programs and continue to offer them.

Links and more information

• A business case for workplaces wellness programs from the Public Health Institute and the American Public Health Association

• Final rules on wellness programs released in May 2013

• “A Culture of Inclusion in Workplace Wellness” from the U.S. Dept. of Health and Human Services

• “Premium Incentives to Drive Wellness in the Workplace” from the Robert Wood Johnson Foundation

• RAND Corp says nearly half of U.S. companies offer wellness initiatives

• “Poll shows workplace wellness is catching on” from the Public Health Institute

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The 2010 health law goes into effect Jan. 1, 2014. How will it affect you, your wallet and your health? Email your questions to healthandscience@whyy.org or tweet us at @NewsWorksWHYY.