Wellness Program Compliance & Cost Containment Strategies

Transcription

1 Wellness Program Compliance & Cost Containment Strategies Jennifer Martinsen, West Region Director Health & Performance

2 LET S TALK ABOUT Wellness Program Compliance Legislation Types of Wellness Programs Incentives Cost Containment Strategy Q & A 2

3 LEGAL ASPECTS OF WELLNESS PROGRAMS

4 PRIMARY LAWS GOVERNING WELLNESS PROGRAMS Health Insurance Portability and Accountability Act (HIPAA), as Amended by the Affordable Care Act Title I of the Americans with Disabilities Act Title II of the Genetic Information Nondiscrimination Act Patient Protection and Affordable Care Act 4

5 EEOC PROPOSED RULES What is meant by voluntary Employer may offer limited incentives to both employees and spouses as part of wellness programs and can include disability-related inquiries and/or medical examinations Explains confidentiality requirements Explains relationship of rules governing wellness programs to other EEOC laws 5

6 WHEN IS A HEALTH PROGRAM VOLUNTARY? For a health program that includes disability-related inquires or medical examinations to be voluntary, an employer may NOT: Require employees to participate Deny access to health coverage for nonparticipation Limit coverage under its health plans or particular benefits packages within a group health plan for such employees, except in certain circumstances Take any other adverse action or retaliate against, interfere with, coerce, intimidate, or threaten employees as prohibited under the ADA 6

7 TYPES OF VOLUNTARY WELLNESS PROGRAMS Participatory Activity-Only Health Contingent Outcomes- Based 7

8 TYPES OF WELLNESS PROGRAMS: PARTICIPATORY ONLY Participants don t have to meet a health standard in order to receive a reward Must follow the 9.5% affordability rule (before reward is applied) Reward incentives must equal less than 30% of total premium Must offer reasonable alternatives and an appeals process *if a medical issue exists Both employee and spouse can qualify for incentive Examples Completing a health risk assessment or screening (with no further action required) Attending lunch-and-learn session(s) Engaging in a campaign or activity such as walking program, community event (5K or Habitat for Humanity), or a combination of several activities. 8

9 TYPES OF WELLNESS PROGRAMS: HEALTH CONTINGENT (ACTIVITY-ONLY) Just like it sounds participants perform an activity to earn a reward Don t have to meet or maintain a specific health outcome Must follow the 9.5% affordability rule (before reward/penalty) Max 30% reward or 50% penalty (if tobacco affidavit/ Cotinine testing is done) Must offer reasonable alternatives and an appeals process *even if NO medical issue exists Both employee and spouse can qualify for incentive Examples Walking / nutrition / exercise programs Some employees may have difficulty participating due to health conditions like asthma, recent surgery, pregnancy Wellness plans can request a physician statement to allow applicability of rewards Completing a tobacco cessation course Completing a weight management program 9

10 TYPES OF WELLNESS PROGRAMS: HEALTH CONTINGENT (OUTCOMES-BASED) An individual is required to accomplish health goals to obtain a reward (or avoid a tobacco penalty) Same guidelines as with Activity-Only Health Contingent programs Plus FIVE (5) conditions under ACA: 1. accomplish 1X year 2. limit reward/penalty 3. designed to promote/prevent disease 4. waiver if unreasonably difficult or medically inadvisable (activity) 5. reasonable alternative standard, with disclosure Examples Meeting biometric health markers (such as BMI <30) in order to qualify for an annual health plan premium discount Being tobacco free Tobacco user completing a tobacco cessation program and/or quitting the use of tobacco 10

11 WELLNESS PROGRAM STRUCTURE Participation-Based (regardless of health status) Activity-Only (based upon health status) Health-Contingent Outcomes-Based (based upon health status) Examples Screening incentive Attending lunch and learn Fitness reimbursement Completing a HRA Completing a tobacco cessation program Exercise, diet or walking programs Goal tied to a health outcome (cholesterol, BMI, blood pressure, glucose, tobacco free) Reasonable Alternative Must offer a reasonable alternative Must offer a reasonable alternative or full reward, even if no medical issue exists Must offer a reasonable alternative and full reward, even if no medical issue exists Communicate clearly that a physician can provide a waiver or reasonable alternative to receive the full reward Type 2 Appeal Must offer a reasonable alternative and full reward if a medical issue exists Communicate clearly that a physician can provide a waiver or reasonable alternative to receive the full reward Size of Financial Impact Max 30% reward (without tobacco) Must be considered voluntary and positioned as a reward Must follow the 9.5% affordability rule (before reward/penalty) Cannot limit benefits or deny coverage to those who don t participate Max 30% reward (without tobacco) Max 30% or 50% penalty (including tobacco with/without Cotinine testing) Must be considered voluntary and follow 9.5% affordability rule (before reward/penalty) Tobacco users who complete a cessation program or quit should receive retroactive premium credit as a non-smoker Cannot limit benefits or deny coverage to those who don t participate 11

12 WHAT INCENTIVES ARE PERMITTED? Health assessment, biometric screening and/or tobacco screening participation is allowed Affordability and maximum incentive testing must be performed on the total of ALL incentives offered Incentive cannot exceed max allowable % of the total cost of employee-only coverage: Good health = 30% reward Tobacco use = 30% penalty (Nicotine test) = 50% penalty (affidavit only) Total reward can t exceed 50% limit, if tobacco affidavit is used. Examples: 30% for walking + 20% for tobacco ok 10% for BMI + 40% for tobacco ok 30% for BMI + 30% for tobacco X = more than 50% total 12

13 TOBACCO USE PREMIUM DIFFERENTIALS Continued ACA support for incentives tied to tobacco status resulted in an increase in employers offering lower premium contributions to non-tobacco users. Employers Incenting Non-Tobacco Users 21% Although the ACA supports a maximum incentive for non-tobacco use of 50% the cost of health coverage, only 6% of employers say they will set their incentive in line with this maximum 10% 12% 15% 17% $480: The median annual tobacco vs. nontobacco user differential Self-confirmation is the most popular than testing to determine tobacco status. Only 17% of employers with these programs test (for example, with a cotinine test) % of employers that have policies or incentives regarding tobacco use include e- cigarettes in the definition of tobacco Source: Mercer National Survey of Employer- Sponsored Health Plans, 2015 Survey Report 13

14 COST CONTAINMENT STRATEGY

15 WELLNESS AS A STRATEGIC INITIATIVE People are your most valuable asset Today more and more employers are recognizing the power of putting people first because when employees can t make time to practice healthy habits, it impacts their performance and in-turn, the business. When companies make wellbeing a strategic initiative employees become: More efficient More effective More productive Employees who don t get enough sleep are 32% less productive 1 Employees who regularly exercise during their workday get a cognitive uplift of 23% 2 1. Making the Case: Supporting Employee Well-being. Virgin Pulse International Journal of Workplace Health Management It all starts with a clear strategy Company leaders need to focus on integrating a wellbeing strategy into the overall corporate strategy. That means: Clearly defining objectives Identifying resources, needs and partners Allocating a budget that can yield sustainable results 15

16 IMPACT OF HEALTH MANAGEMENT PROGRAMS Positive Impact on Disability Cost Trend 5% Improved Attraction and Retention 7% Improved Productivity 9% Positive Impact on Medical Cost Trend (>= cost of program) 37% No Positive Impact Seen So Far 9% Have Not Attempted to Measure 48% 0% 10% 20% 30% 40% 50% 60% Source: 2014 National Survey of Employer- Sponsored Health Plans, Mercer 16

17 DEDICATED APPROACH HEALTH & PERFORMANCE Measure & Evaluate Strategy & Goals Educate & Engage Goal Deliver Innovative Consultation and Proven Solutions to Create a Healthy, High-Performing Organization Collect & Analyze Define & Design 17

18 POPULATION HEALTH MANAGEMENT Health Care Costs Health Status Productivity Human Capital Wellbeing Decrease cost trend & utilization Value is in cost management Improve health status, risk, and status of population Manage high cost cases & groups Manage lifestyle putting people at risk Reduce absence, disability, and worker s compensation Increase presenteeism Support safety initiatives Generate more value Critical element of business strategy Value on Investment Recruitment, retention, & morale Key to corporate culture of health & performance Supports link between business & wellbeing Holistic view of quality of life Employee-centric 18

19 KEYS TO SUCCESS Complement your corporate vision Annual plan and established goals Get your leadership & management at all levels on board first Effectively communicate and engage Leadership Vision & Support Environment & Culture Aligned Communication & Incentives Make wellness part of your company fabric (including existing meetings and gatherings) Steer the change by fostering a healthy workplace culture and policies Remove physical and cultural barriers Policies & Plan Design Targeted Initiatives with Measurable Goals 19

20 3-YEAR STRATEGY Program Design Goal Awareness/Participation Engagement/Acknowledgement Accountability Personal & Organizational Incentive Design Introduce preferred premium for wellness program participants who meet requirements Preferred premium continues; emphasize program participation, education, realization of goals, coaching and activity. Consider additional incentives for healthy outcomes. Incentives earned for achieving healthy outcomes or making progress toward goal. Program Type Participation-based Participation-based Health Contingent Requirements for Incentive Health Risk Assessment Lab/Biometric Screening Tobacco Cessation strong promotion; not tied to financial incentive Year 1 Health Risk Assessment Lab/Biometric Screening Coaching required for Moderate and High Risk Activity tracker and baseline activity tracking requirement Tobacco Cessation required Health Risk Assessment Lab/Biometric Screening Coaching required for Moderate and High Risk Meet set health standards or personal health score Activity tracker and baseline activity tracking requirement Tobacco Cessation required Eligibility Offer to employees only Offer to employees only Offer to employees and voluntary for spouses covered on this plan Communication Create your brand Lead the way; define who you want to become Communicate to the EE s at work and at home Build on the brand and integrate into all EE health and safety communications. Continue strong push for what s been achieved who you have become 20

21 CASE STUDY WILDAN CHALLENGE SOLUTION RESULT Mounting costs due to growth and changing healthcare landscape. Multiple years of double-digit medical premium increases. An aggressive consumer-based benefits, wellness & employee engagement program. 2013: First year savings to Wildan of $1.56M 2015: 6% medical renewal; reduced avg. PEPM costs by 11% Background ~300 employees, multiple locations Low morale, recent layoffs Cost containment priority Health & Performance 3-year integrated strategy, benefits and wellness Participatory program; Goal: reduce cost and increase employee morale Entering year 3 of program 75% participation, improved biometric measures Reduced trend from repeated double digit increases to 6% in 2015 * See detailed client case study for more information 21

22 QUESTIONS & ANSWERS

23 THANK YOU Jennifer Martinsen Director, Health & Performance West Region Employee Benefits HUB International Subscribe to ACA Bulletins Learn More about HUB International Follow Us LinkedIn: HUB International 2016 All Right Reserved