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www.hubemployeebenefits.com
Wellness Program Compliance & Cost Containment Strategies Jennifer Martinsen, West Region Director – Health & Performance #LetsDoSomething
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LET’S TALK ABOUT
• Wellness Program Compliance • Legislation • Types of Wellness Programs • Incentives
• Cost Containment Strategy • Q & A
LEGAL ASPECTS OF WELLNESS PROGRAMS
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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
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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
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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 non-
participation • 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
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TYPES OF VOLUNTARY WELLNESS PROGRAMS
Participatory
Health Contingent
Activity-Only
Outcomes-Based
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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.
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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
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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
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WELLNESS PROGRAM STRUCTURE
Participation-Based (regardless of health status)
Health-Contingent
Activity-Only (based upon health status)
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
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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
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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.
• 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
• $480: The median annual tobacco vs. non-tobacco 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)
• 46% of employers that have policies or incentives regarding tobacco use include e-cigarettes in the definition of tobacco
10% 12%
15% 17%
21%
2010 2011 2012 2013 2014
Employers Incenting Non-Tobacco Users
Source: Mercer National Survey of Employer- Sponsored Health Plans, 2015 Survey Report
COST CONTAINMENT STRATEGY
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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 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
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. 2014 2. International Journal of Workplace Health Management
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IMPACT OF HEALTH MANAGEMENT PROGRAMS
48%
9%
37%
9%
7%
5%
0% 10% 20% 30% 40% 50% 60%
Have Not Attempted to Measure
No Positive Impact Seen So Far
Positive Impact on Medical Cost Trend (>= cost of program)
Improved Productivity
Improved Attraction and Retention
Positive Impact on Disability Cost Trend
Source: 2014 National Survey of Employer- Sponsored Health Plans, Mercer
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DEDICATED APPROACH – HEALTH & PERFORMANCE
Goal Deliver Innovative Consultation and Proven Solutions
to Create a Healthy, High-Performing
Organization
Strategy & Goals
Collect &
Analyze
Define & Design
Educate & Engage
Measure & Evaluate
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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
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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
• 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
Leadership Vision & Support
Aligned Communication
& Incentives
Policies & Plan Design
Targeted Initiatives with
Measurable Goals
Environment & Culture
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3-YEAR STRATEGY
Program Design 2016 2017 2018
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
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CASE STUDY – WILDAN CHALLENGE Mounting costs due to growth and changing healthcare landscape.
Multiple years of double-digit medical premium increases.
SOLUTION An aggressive consumer-based benefits, wellness & employee engagement program.
RESULT 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
QUESTIONS & ANSWERS
#LetsDoSomething
THANK YOU
Subscribe to ACA Bulletins www.hubhealthreform.com Learn More about HUB International www.hubemployeebenefits.com Follow Us Twitter: @HUBInsurance LinkedIn: HUB International
© 2016 All Right Reserved #LetsDoSomething
Jennifer Martinsen Director, Health & Performance West Region Employee Benefits HUB International jennifer.martinsen@hubinternational.com
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