Wellness Plans in the Age of Health Care Reform

Transcription

1 Wellness Plans in the Age of Health Care Reform February 2013

2 Wellness Plans Overview Why have a wellness plan? Types of wellness plans Legal Requirements Concerns Developing and Maintaining Page 2

3 Why have a Wellness Plan? Healthier Workforce Less Absenteeism Decrease Insurance Costs For Employer and Employee Morale Booster Healthier employees = More Productivity Page 3

4 Win Win for Employer and Employee Page 4

5 Types of Wellness Plans: Type #1 Participatory Wellness Programs Type #2 Health-Contingent Wellness Programs Page 5

6 Type #1: Participatory Wellness Programs Programs that offer an incentive to participate in a wellness activity The reward or incentive is not tied to the health plan The reward or incentive is not contingent upon a particular outcome or reaching a specified health standard. Page 6

7 Examples of Participatory Wellness Programs: Reimbursement of health club dues Rewards for employees to attend monthly no-cost health education seminars Stress Management Training Reimbursements for smoking cessation programs, without regard as to whether the individual actually quits smoking Flu Shots Health Risk Assessments that do no base reward on test outcomes Page 7

8 Participatory Wellness Program Notes: No limit to the amount of the reward or the incentive Only requirement is that the program be offered to all similarly situated individuals ADA Concerns if reward is too strong Page 8

9 Type #2: Health-Contingent Wellness Programs Requires employees to reach or maintain a certain health goal before they can receive a reward or incentive. Page 9

10 Examples of Health-Contingent Wellness Programs: Programs that impose a premium surcharge on smokers Programs that use biometric screenings or health risk assessments to identify employees with specific medical conditions or risk factors Programs that reward employees who score with in a normal or healthy biometric range. Those outside the range must take additional steps to earn a reward (meet a health coach, take a health/fitness course, adhere to an action/treatment plan). Page 10

11 Health-Contingent Wellness Program Rewards: If a participant meets specific health targets, then he or she could receive: Varied Benefits Lower Premiums Greater Employer Contributions In order for this type of discrimination to be allowed, such wellness programs must meet HIPAA non-discrimination requirements! Page 11

12 Current Requirements for Health- Contingent Wellness Programs (until first day of first plan year after 1/1/14) The total reward (incentive) cannot be greater than 20%* of the total cost of coverage under the plan The program must be reasonably designed to promote health or prevent disease. The program cannot be overly burdensome or a subterfuge for discrimination based on a health factor Program must give eligible employees an opportunity to qualify for the incentive at least once per year Page 12

13 Current Requirements for Health- Contingent Wellness Programs (until first day of first plan year after 1/1/14) (cont.) The reward must be available to all similarly situated employees. Plan must provide a reasonable alternative (or waiver of the applicable standard) when, due to a medical condition, it is too difficult for a participant to achieve the target standard. In all materials describing the plan, the employer must address the availability of a reasonable alternative.* Page 13

14 Requirements for Health-Contingent Wellness Programs (beginning first day of first plan year after 1/1/14) Total reward (incentive) maximum will increase to 30%. Total reward (incentive) maximum can be increased to 50% for health-contingent wellness programs designed to prevent or reduce tobacco use. Can only apply to the smoker s portion of the premium (not overall family premium) New model language for documents regarding reasonable alternatives and more guidance on reasonable alternatives. Page 14

15 Calculating the Maximum Reward The amount of the reward cannot exceed the applicable percentage (20%, 30% or 50%) of the gross cost of health coverage. Gross cost of coverage depends on who can participate in the wellness program. Example: If only an employee can participate, then the employer should use the gross cost of single coverage to calculate maximum percentage. If employer offers wellness activities to any class of dependents, the reward cannot exceed the applicable percentage of the total cost related to that class of dependents. (If the plan only uses single or family, then an employer may use the family rate.) Page 15

16 Reasonable Alternative Standards In lieu of offering a reasonable alternative, the new guidance states that a plan can waive the health target all together and provide the reward. This can be done on a case-by-case basis or for entire class of employees. Example: A wellness plan requires a BMI of 30 or less. Joe, an employee, is a weight lifter who exercises regularly and eats nutritiously. Because of his muscle mass, Joe s BMI is 32. The plan can choose to waive the standard because Joe is healthy, and the BMI does not adequately reflect Joe s health status. Page 16

17 Reasonable Alternative Standards (cont.) A plan is not required to develop a reasonable alternative in advance, but must provide one upon request. Plans must offer a reasonable alternative every year. The reasonable alternative can be one that the group has used in the past, or it can be a new one. Page 17

18 Examples of Reasonable Alternatives: If someone cannot meet specified cholesterol target level, then the alternative could be participation in a Heart Smart education program offered by a local hospital. If that same individual still cannot meet the cholesterol target, in the second year, a reasonable alternative could require the employee to meet with and follow a physician s recommendations. Page 18

19 Determining if a Plan Offers a Reasonable Alternative: All facts and circumstances will be taken into account: If the reasonable alternative requires an employee to complete an educational program, then the employer must make the educational program available and cover the cost. If the reasonable alternative is a diet program, the plan does not need to pay the cost of food, but must pay the membership/participation fees. If the reasonable alternative is complying with the recommendations of the plan s medical professional, the employee s personal physician can override and determine the reasonable alternatives. Page 19

20 Informing the Group about the Reasonable Alternative Standard: Model Language Your health plan is committed to helping you achieve your best health status. Rewards for participating in a wellness program are available to all employees. If you think you might be unable to meet a standard for a reward under this wellness program, you might qualify for an opportunity to earn the same reward by different means. Contact us at [insert contact info.] and we will work with you to find a wellness program with the same reward that is right for you in light of your health status. Page 20

21 Americans with Disabilities Act ( ADA ) Concerns Individuals with disabilities must have an equal opportunity to participate in or receive benefits under any program offered by the employer Employer must protect confidentiality of medical information of employees and can only require medical exams under specific conditions Page 21

22 Age Discrimination in Employment Act ( ADEA ) Concerns Employer cannot adopt practices that have an adverse impact on older workers, unless based on a reasonable factor other than age. Page 22

23 National Labor Relations Act ( NLRA ) Concerns Wellness plan is a term of employment Union employers must bargain to come to terms and conditions of employment Page 23

24 COBRA Concerns Wellness plan will be subject to COBRA only if it provides or reimburses participants for medical care. Page 24

25 Keys to Developing a Wellness Plan Address specific risks Fit within corporate culture Encourage continued participation Present program in a positive way Management Encouragement Page 25

26 Where to Start?? Complete Wellness Questionnaire (handout) Look at options offered by carriers Look for third party providers, if needed Develop written plan, if needed Pre-educate employees Page 26

27 THANK YOU! We hope you found this webinar helpful. Please join us for next month s Compliance and Health Care Reform webinars: March 20 th at 10 am: The Effects of Health Care Reform on Small Businesses March 26 th at 10 am: Managing Benefit Eligibility Like a Pro with FMLA, Workers Comp, Military and/or Disability Leaves This Power Point is provided for informational purposes only and does not constitute legal advice. The Power Point contains only a summary of the applicable legal provisions and does not purport to cover every aspect of any particular law, regulation or requirement. Depending on the specific facts of any situation, there may be additional or different requirements. Please use this Power Point as a guide and not as a definitive description of your compliance obligations. Page 27