Employer wellness grants, higher discounts for wellness programs allowed under health care reform
Nov. 19, 2010
Beginning in 2011, the Patient Protection and Affordable Care Act will make available $200 million in grants for small business wellness programs.
Additionally, employers can offer higher incentives to employees who participate in group-sponsored wellness programs beginning in 2014.
The wellness grants are available to small businesses with fewer than 100 employees who work 25 hours or more per week. They will be available over five years to businesses that did not have a wellness program in place when the law went into effect on March 23, 2010.
To qualify, wellness programs must be available to all employees and include the following:
- Health awareness initiatives, such as health education, preventive screenings and health risk assessments
- Efforts to maximize employee engagement and encourage participation
- Initiatives to change unhealthy behaviors and lifestyle choices (such as seminars, counseling, online programs and self-help materials)
- Supportive workplace efforts, including policies to encourage healthy lifestyles, healthy eating, increased physical activity and improved mental health.
Employers will apply for the grants directly with the federal government.
Starting Jan. 1, 2014, employers can offer discounts of up to 30 percent to employees who participate in employer-sponsored wellness programs, an increase from the current 20 percent. (This reward could increase to 50 percent at the discretion of the secretaries of the departments of Health and Human Services, Labor or Treasury.)
If a wellness program ties rewards to health status goals, such as reaching a certain body mass index (BMI), blood pressure or cholesterol level, certain conditions must be met:
- Rewards for all goal-based wellness programs cannot exceed more than 30 percent of the cost of employee-only or family coverage through the plan.
- The wellness program must set an easily met standard for improving health status or preventing disease among participants. The program also must not be overly burdensome, cannot be used to discriminate based on health status and cannot use highly suspect methods to promote wellness.
- Eligible individuals should be able to qualify for the reward at least annually.
- The program must offer reasonable alternative standards (or a waiver) for obtaining the reward to any individual who cannot satisfy the standard for that period due to unreasonable difficulty resulting from a medical condition or medical inadvisability.
- The group health plan or health insurer can seek verification from the individual’s doctor.
- Programs do not need to establish an alternative standard until an enrollee informs the health plan that they are unable to participate due to health reasons.
- Alternative standards could include meeting a lower threshold, following a personalized physician recommendation, walking three days a week for 20 minutes, etc.
- Notification and/or details that alternative standards or a waiver exists must be disclosed in plan materials.
The reform law will also create a 10-state pilot project by July 1, 2014 to allow participating states to use similar rewards for involvement in wellness programs in the individual market.
It is difficult at this time to say whether Michigan will seek to qualify for the project. States will be deemed eligible if it is determined that participation will not result in any decrease in coverage and will not increase costs to the federal government when providing premium tax credits.
If determined to be effective, the demonstration project will expand to additional states beginning July 1, 2017.
The information on this website is based on BCBSM's review of the national health care reform legislation and is not intended to impart legal advice. Interpretations of the reform legislation vary, and efforts will be made to present and update accurate information. This overview is intended as an educational tool only and does not replace a more rigorous review of the law's applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. Analysis is ongoing and additional guidance is also anticipated from the Department of Health and Human Services. Additionally, some reform regulations may differ for particular members enrolled in certain programs such as the Federal Employee Program, and those members are encouraged to consult with their benefit administrators for specific details.