Wellness & The ACA: It's not As Bad As You Fear!

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WELLNESS &
THE ACA:

It’s not as Bad as You Fear!

©2014 WellnessRebates, LLC. All Rights Reserved.

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How Did We Get Here?
1. 1996 – HIPAA – group health plans and issuers cannot
health factor
a. Exception: Rewards for adherence to a
wellness program
2.
established standards for qualifying for HIPAA exception
3.
(“PPACA” or “ACA”)
a. Increased allowable incentive amounts and
b. First draft – November 2012
c. Final rules:
i. Released – May 29, 2013
ii.
grandfathered) - Jan 1, 2014

Why Wellness Regs Part of PPACA?
1. Wellness programs becoming more common
a.
2. Employers increasing use of wellness incentives
a. 2012 – 87% of employers with >200ees plan to add or strengthen incentive programs
(2012 Mercer Survey)
b. Incentives above $50 tied to increased participation in wellness programs and
smoking outcomes (RAND Corp)
3. Government “believes that appropriately-designed wellness programs have the potential to
contribute importantly to promoting health and preventing disease.”

Objective of Final Regulations
(i.e. to be found as non-discriminatory)
1.
under HIPAA
2.
discrimination and privacy laws (examples: ERISA, GINA, ADA, etc.)


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WELLNESS & THE ACA: IT’S NOT AS BAD AS YOU FEAR!

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Reward
1.
a. Discount or rebate of premium contribution
b. Waiver of all or part of cost sharing (examples: deductible, copayment or coinsurance)
c.
d. Financial incentive
2. Avoiding a penalty
a. Premium surcharge
b.

Two Types of Wellness Incentive Programs
1. Participatory
a. Reward, or conditions for obtaining
reward, unrelated to a “health factor”
(examples: health status, injury, illness,
risk factors like BMI, cholesterol,
glucose, BP, smoking)
b. Majority of wellness programs
c. Examples: Gym reimbursement,
health screening (regardless of
results), attending seminars, etc.
2. Health contingent
a. Reward tied to a health factor
i.
1. Examples:
a.
b. walking or exercise program
ii. Additional requirement due to existence of a health factor
1. Example: because of cholesterol, must complete education seminar
b.
i. Activity only
ii.

Q

QUIZ I – Participatory or Health Contingent?
1) Completing an HRA =
2) Average 10,000 steps a day =
3) Smoking cessation program for smokers =
4) Stress management class for all interested employees =


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Two Types of Health Contingent Wellness Incentives
1. Activity only
a.
i.
1. Examples: Walking, diet or exercise program
ii. Related to a health factor because some people may not be able to participate (or
1. Example: can’t complete walking program due to pregnancy, surgery, asthma
2.
a.
i. Examples: Not smoking, healthy BMI, healthy cholesterol, etc.
b. Generally have 2 Tiers:
i. Tier 1: Measurement, test or screening that evaluates medical condition or
risk factor
1.
ii. Tier 2: Additional wellness programing or health standard targeted to those who
Tier 1 health outcome
1. “Reasonable Alternative Standard” (see below)
2.
c. Examples: Health screening or HRA to determine diabetes risk. Healthy glucose
receives reward. Unhealthy glucose = must attend diabetes risk seminar to obtain
same reward.

Q

1) Smoking cessation program for tobacco users =
2) Averaging 2 workouts a week, open to everyone =
3) Averaging 2 workouts a week, for those with BMI>30 =
4) Dropping BMI by 5% for those with BMI>30 =


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HIPAA Exception for Participatory
1. Wellness program must be made available to all similarly
situated individuals, regardless of health status
a. No health status requirement = no discrimination
b.
i.
1.
2.
3.
4.

HIPAA Exception for Health-Contingent
1. Five requirements for both activity-only and outcome-based
a. Frequency of reward - Must give employees opportunity to qualify at
least once a year
I. Full reward must be given to anyone who meets standard in calendar year
1.
2. All payments must be awarded within year (No pro-rata into following year)
b. Size of reward
i. Employee-only wellness program
1. No more than 30% of total cost of employee-only plan
a.
ii.
1. No more than 30% of total cost of plan enrolled
b.
2.
iii.
c. Reasonably designed to promote health or prevent disease
i. Broad requirements:
1.
2. Not overly burdensome
3. Not “subterfuge” for discrimination
4.
ii.
1. Based on facts & circumstances – regs do not require adherence to any
2. Many resources describing best practices (Joint Consensus Statement;
WellnessRebates Webinar)


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d. Uniform availability - Full reward must be available to all similarly-situated individuals
i. For all health-contingent:
1. Must provide reasonable alternative standard (“RAS”) or waiver for those who:
a.
b. Medically inadvisable to attempt to meet standard
2. Special rule for outcome-based (see below)
3.
ii. No need to seek out those who qualify for RAS or waiver, but must grant if
iii. Reasonableness of alternative standard based on facts and circumstances, but
some special rules (see below)
e. Notice requirements
i.
describing terms of health-contingent wellness
program (not just mentioning that program exists)
1.
program, etc.
ii. Notice must disclose:
1. availability of reasonable alternative standard or possibility of waiver
2.
3. statement that recommendations of personal physician will be
accommodated

Special Rules
1.
a. Reasonable design & uniform availability
i.
1.
a.
medically inadvisable
2.
a. Must provide additional time to meet standard, taking to account
individual circumstances
i.
b. Must allow compliance with doctor recommendation as RAS if doctor
joins the request
i. Employee can request compliance with doctor recommendations at
any time
ii. Doctor can adjust recommendation at any time, consistent with
medical appropriateness
b.


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2.
special rules:
a. If RAS is completion of education program:
i.
ii. Employer must pay for cost of program
iii.
1. Example in regs: nightly attendance for 1 hour class is unreasonable
b. If RAS = Diet program
i. Employer must pay membership or participation fee
ii.
3. Wellness programs and doctor’s notes:
a.
i. Applies to initial standard or established RAS
ii.
medical judgment is required to establish validity of employee’s request
b. If employee’s doctor says RAS is not medically appropriate, must provide RAS
that is compliant with doctor’s recommendations
i.
c.
i.
1.
ii.
joins the request
1. Employee can request compliance with doctor recommendations at any time
2. Doctor can adjust recommendation at any time, consistent with medical
appropriateness


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ie

Example 1:
a. Facts:

receives $1000.
b.
everyone the opportunity to obtain reward, regardless of health factor.

Example 2:
a. Facts:
year’s screening.
b.
progress, by allowing employees who do not satisfy initial health standard an opportunity to
earn reward by showing improvement (example: meeting lower outcome-based standard, like
dropping 5% of body weight or completing educational program on healthy eating).

Example 3:
a. Facts:
Dorothy attends screening, has BMI of 32, and does not receive deduction. Notice describing
pay for cost of program or food.
b.
not required to pay for cost of food.


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Key Themes in Final Wellness Regs:
1.
a. Examples:
i. No established standards for “reasonable” design or alternative standards
1.
ii.
1.
iii.
iv.
way around)
v. No limitation on which health conditions can be targeted with wellness programs
vi. No required incentive payment structure (other than must be paid in applicable year).
vii.
(example: doctor vs nurse)
viii.
b.
2. RAS rules are meant to protect those with medical conditions and encourage progress towards
health goals
a. Avoid discrimination by ensuring that, in all types of wellness programs, every participant
should be able to receive the full amount of any reward or incentive, regardless of health factor
b
goal
i.
can experiment and should continue to provide support.
3.
a. RAS requirement ensures that unhealthy are always given opportunity to earn reward
i.
goals, fail to meet goals, choose not to participate in program)
b.
to meet health standards associated with better or improved health, which in turn is associated
as an individual’s health improves. Some of these lower health care costs could translate into

A

QUIZ I & II – ANSWERS
QUIZ I:
1)
2)
3)
4)

participatory
health contingent
health contingent
participatory


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QUIZ II:

1) outcome-based
2) activity only
3) outcome-based
4) outcome-based
5) activity only

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Notes

Questions for WellnessRebates


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©2014 WellnessRebates LLC
CONTACT US
info@wellnessrebates.com
888.208.2788
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Wellness & The ACA: It's not As Bad As You Fear!

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