Wellness Programs and the Affordable Care Act (ACA)

 The “trinity” of ACA enforcement (i.e., Departments of Labor, Treasury, and Health and Human Services) issued final regulations relative to wellness programs and rewards, on May 29, 2013. There were no surprises to what we already knew from the law itself.  But reviewing the briefing reminded me that there are two (2) profoundly different types of wellness programs:

1. “Participatory”; and 2. “Health-Contingent”.  Program rewards for the later are regulated/limited by the ACA, beginning in 2014, to no more than 30% (an increase from the present amount of 20%).  However, there are NO LIMITS placed/regulated for the former type – Participatory – wellness programs.  It is also important to note that the ACA allows a penalty of up to 50% for programs related to tobacco use.

Another important distinction to note relative to Wellness Programs, are the two (2) types of Health Contingent programs that exist: 1. “Activity-Only” (think walking programs, biggest loser contests, weight watchers, etc.); and 2. “Outcome-Based” (specific health related targets such as BMI or blood pressure must be attained in order to receive a reward).  And remember, reasonable alternatives must be made available to individuals (activity-only program) for whom attaining the goal is unreasonably difficult due to a medical condition; and for ALL INDIVIDUALS  (outcome-based program) who do not meet the program’s standard(s).

Wellness programs have proven to be very effective at reducing healthcare related costs, improving morale, and reducing the incidence rates of absenteeism and presenteeism.  I’ve seen return on investment (or ROI) figures ranging from 3:1 – 8:1.  It’s important to know what you can and can not do in the area of “carrot and stick”, along with recognizing what areas of the company or organization should be the focus or target of the wellness program.