Wellness programs have come to the attention of businesses across the U.S. due to the combination of a rising interest in workplace health programs, efforts to contain ever-increasing health insurance premiums, and now the advent of the Patient Protection and Affordable Care Act. These programs are of particular interest in ESOP companies, where stock ownership through the plan is often combined with a corporate culture of openness, shared effort, and shared rewards that is conducive to a variety of innovative structures. This issue brief, a successor to an earlier publication on wellness issues, explores key elements of successful programs, results of nationwide research studies on the topic, and current legal issues such as the effect of the Affordable Care Act.
Table of Contents
Legal Issues for Wellness Programs
The Legal Framework
ADA, GINA, HIPAA, and the Internal Revenue Code
Taxation of Incentives/Benefits
Wellness Programs and HSAs
Key Elements of a Successful Wellness Program
Launching a Wellness Plan
Helping Employees Assess Risk
Making Sure the Program Addresses Employee Needs
Healthy Lifestyle Communications and Education and Programs
Employee Ownership Case Studies
Cooperative Home Care Associates
New Belgium Brewing Company
Woodfold Manufacturing Inc.
About the Authors
From "Legal Issues for Wellness Programs" (footnotes omitted)
Under the Patient Protection and Affordable Care Act (PPACA), as modified by the Health Care and Education Affordability Reconciliation Act (H.R. 4872), the DOL further amended the regulations. The new amendments maintained the two categories of plans; however, effective January 1, 2014 (for calendar year plans), they increased the applicable reward to 30%, and possibly up to 50% if the Secretaries of Health and Human Services, the United States Department of Labor, and the Department of the Treasury (the "Agencies") determine that such an increase is appropriate. On June 3, 2013, the Agencies issued final regulations amending the 2006 HIPAA nondiscrimination wellness regulations to implement the employer wellness program provisions of the PPACA. The final rules retain the two categories of wellness programs: "participatory wellness programs" and "health-contingent wellness programs." The participatory wellness program rules are basically unchanged from the current 2006 regulations. Participatory wellness programs comply with the HIPAA nondiscrimination requirements as long as the participant does not have to satisfy any additional standards and participation in the program is made available to all similarly situated individuals, regardless of health status. However, the final rules update and expand on the requirements for health-contingent wellness programs, which condition a reward on a participant's satisfaction of a standard related to a health factor.
Under the final rules, there are two types of health-contingent wellness programs, "activity-only" programs and "outcome-based" programs. An activity-based wellness program provides a reward if an individual performs or completes an activity related to a health factor, but it does not require the individual to satisfy any specific health outcome. Examples include walking or exercise progams in which a reward is provided just for participation, or rewards for taking a health risk assessment without requiring any further action. An outcome-based wellness program requires an individual to either attain or maintain a specific health outcome—for example, not smoking or achieving certain results in biometric screenings—to obtain a reward.
All health-contingent wellness programs must meet five requirements:
From "Employee Ownership Case Studies" (figure omitted)
At the beginning of each year, Web's employee owners participate in a health assessment. This standardized instrument measures the number of health risks for employees, based on 15 risk factors. The primary areas for focus in the behavior change programs have been on tobacco cessation, weight management, physical activity, and healthy eating.
One of the program elements that we believe has driven the success of the program, is individualized health coaching. AdvancingWellness provides a full-time person dedicated to Web Industries in the role of health coach/wellness coordinator. The coach travels to each of the divisions to meet in person with employee owners. She helps each person identify personal goals and the action plan to help the goal. She can keep in touch by secure email provided in the health portal to hold the individual accountable and track his or her progress.
After four years, Web Industries has begun to realize the benefits from its wellness programs. We have seen the number of tobacco users drop from 27% in 2011 to 13% in 2013. Figure 3 shows the changes in risk factors over the past three years of the program. The industry benchmark target is for 70% of the employee population to be in low risk.