wellness program compliance & cost containment strategies · wellness program compliance &...

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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


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


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


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


TYPES OF VOLUNTARY WELLNESS PROGRAMS

Participatory

Health Contingent

Activity-Only

Outcomes-Based


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.


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


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


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


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


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


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


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


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


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


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


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


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

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© 2016 All Right Reserved #LetsDoSomething

Jennifer Martinsen Director, Health & Performance West Region Employee Benefits HUB International [email protected]

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