Wellness ROI Irresistible—$6 for Every $1 Invested

Benefits
by Stephen Bruce, PhD, PHR
"Wellness pays. According to one study, $3 in insurance claims and an additional $2.73 in reduced absenteeism for every $1 an employer spends, says attorney Frank C. Morris Jr."

Furthermore, Morris adds, your wellness program may get way more important under the Affordable Care Act. Morris, who specializes in benefits, is a member of the firm Epstein Becker Green in its Washington, D.C., office.

Wellness Is Popular, But Hard to Define

A recent survey found that 70.3 percent of 539 employer respondents reported offering wellness initiatives, with a little more than half saying their programs are less than 5 years old. And some 63 percent said they’d boosted their wellness budgets over the past 5 years.

So What’s a Wellness Program?

There is no statutory definition of a wellness program, even in the Affordable Care Act. Wellness programs are all over the lot, ranging from comprehensive efforts that include professional disease management to far less formal initiatives such as an occasional on-site Weight Watchers® series, a smoking cessation program, a health fair, or a lunch-and-learn sponsored by the organization’s healthcare insurer.

What Should Wellness Target?

Wellness is not very complex for most employers. Since heart disease is the number one killer, and since we know how to fight heart disease (control blood pressure and cholesterol, reduce weight, exercise, stop smoking, reduce stress), and since those actions also improve general health in many ways, it’s fairly easy to see how to target a wellness program.

May Wellness Programs Consider Health Factors?

Programs can include initiatives that are conditioned on a health status factor such as smoking or obesity, or on general health. But any such program faces a number of barriers contained in HIPAA (the Health Insurance Portability and Accountability Act), the ADA (the Americans with Disabilities Act), and GINA (the Genetic Information Nondisclosure Act).


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HIPAA, GINA, and ADA Barriers

The HIPAA nondiscrimination provisions generally prohibit group health plans from charging similarly situated individuals different premiums or contributions or imposing different deductible, copayment, or other cost-sharing requirements based on a health factor.

Health factors include health status, medical condition (including both physical and mental illnesses), claims experience, receipt of health care, medical history, genetic information, evidence of insurability (including conditions arising out of acts of domestic violence), and disability.

However, there is an exception that allows plans to offer wellness programs if they meet certain criteria. A wellness program that conditions a reward on an individual satisfying a standard related to a health factor must meet these five requirements:

  • The total reward must be limited. Generally, before 2014 it must not exceed 20 percent of the cost of employee-only coverage under the plan.
  • The program must be reasonably designed to promote health and prevent disease.
  • The program must give individuals eligible to participate the opportunity to qualify for the reward at least once per year.
  • The reward must be available to all similarly situated individuals. The program must allow a reasonable alternative standard (or waiver of the initial standard) for obtaining the reward to any individual for whom satisfying the initial standard is medically inadvisable or unreasonably difficult due to a medical condition.
  • The plan must disclose, in all materials describing the terms of the program, the availability of a reasonable alternative standard (or the possibility of a waiver of the initial standard).

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GINA and ADA Also Apply

Meanwhile, GINA bars employers from requiring employees to divulge any genetic information, such as individual genetics or family history, and no health risk assessment can require disclosure of GINA-protected information.

Finally, under the ADA, employers may not require employees to participate in any medical exam or otherwise reveal disability-related information. Therefore, any information obtained through a health risk assessment must be given voluntarily, and any and all participation in the program must be voluntary.

In tomorrow’s Advisor, savings from premium differentials and on-site medical clinics, plus an introduction to the all-HR-in-one website, HR.BLR.com.

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  1. Ihisrael        http://www.facebook.com/profile.php?id=100003452693279
    January 23, 2014 11:22 pm

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