Following my colleague’s blog on the new essential health benefits rule and her family’s debate over turkey and football, I’d like to give a brief summary of the wellness rule in the wake of what was probably the most anti-wellness meal you’ll have all year. With a few notable exceptions described below, the wellness rule largely codifies the provisions of the Affordable Care Act (ACA), which itself codified existing HIPAA rules on workplace wellness programs.
What are the current rules for wellness programs? Under the Health Insurance Portability and Accountability Act (HIPAA), employers large and small can establish health attainment programs that tie financial incentives to attainment of health goals such as target blood pressure levels and Body Mass Index (BMI). Currently, employers can provide incentives worth up to 20% of the total premium in the form of lower premiums, deductibles or other cost-sharing. Beginning in January 2014, the ACA increases this amount to allow employers to provide incentives up to 30% of the total premium and authorizes federal regulators to increase this amount to up to 50% of total premiums.
What did the proposed rule do? While last week’s proposed rule addressed both 1) participatory wellness programs and 2) health-contingent wellness programs (or “health attainment programs”), federal regulators did not make changes to the requirements for participatory wellness programs (i.e., when employers have wellness programs but there is no incentive or the incentive is not tied to meeting a certain health outcome). The rule also did not address an ACA demonstration option for wellness programs in the individual market that will be allowed in 10 yet-to-be selected states no later than July 2014
Regarding health attainment programs (i.e., programs that tie incentives to meeting outcomes), the proposed rule retains HIPAA’s protections and reflects two proposed changes. First, HHS proposes to allow employers to increase the amount of the incentive up to 30% of total premium, but with the opportunity to further increase this incentive to 50% if the employer offers a wellness program that is designed to prevent or reduce tobacco use. HHS proposes the higher incentive amount for tobacco-related programs to be consistent with new rating rules that allow insurers to charge tobacco users 50% more for their premiums. HHS also proposes to apply the new rule to plans regardless of their grandfathered status. The upshot is that these wellness rules will apply to all group plans, whether they are small group or large group, insured or self-insured, grandfathered or new.
Second, HHS added new protections to expand employees’ or participants’ access to alternative means of qualifying for a wellness incentive. Alternative means are available if an employee or participant cannot meet the wellness standard or for whom it would be unreasonably difficult or medically inadvisable to meet the standard. In particular, programs that simply test individuals and charge them more, without additional help, will no longer be allowed under the proposed rule. The following protections are included for those who request an alternative standard:
- If the alternative standard is an educational program, the employer or plan should make the program available and at no additional cost to the individual, rather than just point them to the door to find a program on their own.
- If the alternative standard is a diet program, the employer or plan should pay any membership or participation fee for the individual.
- If the recommendations of the individual’s own medical professional conflict with those of the employer’s or plan’s medical professional, the alternative standard must reflect the recommendations of the individual’s medical professional.
Finally, because wellness programs are limited to the group market, the proposed rule did not address wellness programs in the individual market context. The proposed rule did, however, incorporate existing nondiscrimination provisions to coverage sold in the individual market. These provisions prohibit discrimination based on a health factor such as a medical condition, past claims experience, or disability, among others.
What might we see next? The proposed rule seeks comment on a number of areas, some of which were raised as consumer concerns in stakeholder meetings and comments. These areas include:
- Whether additional rules are needed to demonstrate compliance with the reward limits when the reward is variable, such as waived copays for outpatient visits when the number of visits will vary by participant;
- Whether additional rules are needed for the process for determining a reasonable alternative standard;
- Whether standards for “evidence- or practice-based standards” should be included to ensure programs are reasonably designed to promote health or prevent disease; and
- Ways to ensure employees won’t be subject to a “one-size-fits-all” alternative means to qualify for the reward that fails “to take an employee’s circumstances into account to the extent that, as a practical matter, they would make it unreasonably difficult for the employee to access those different means of qualifying.”
Additional guidance on wellness protections for consumers in the individual market is also likely because the proposed rule did not address this program.
As we see more rules and state action, we’ll keep track of it all, so check back with CHIRblog for the latest developments.