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Life Health > Health Insurance > Health Insurance

Feds set a wellness incentive standard under PPACA

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Federal agencies said they have tried to take a moderate approach to setting standards for group health plan wellness incentive programs.

Some groups have asked the agencies to make wellness program rules as flexible as possible.

Other groups want the agencies to make insurers base any incentive programs on standards set by bodies such as the Centers for Disease Control and Prevention (CDC), the National Institutes of Health or formal accreditation organizations.

The federal agencies — the Internal Revenue Service (IRS), the Employee Benefits Security Administration (EBSA) and the U.S. Department of Health and Human Services (HHS) — said today they will compromise by requiring wellness incentive programs to use a “reasonable design.”

“These final regulations state that a wellness program is reasonably designed if it has a reasonable chance of improving the health of, or preventing disease in, participating individuals, and is not overly burdensome, is not a subterfuge for discrimination based on a health factor, and is not highly suspect in the method chosen to promote health or prevent disease,” agency officials said in a preamble to the final rule, Incentives for Nondiscriminatory Wellness Programs in Group Health Plans (CMS-9979-F) (RIN 0938-AR48).

The regulations are set to appear in the Federal Register Friday and take effect 60 days after the official Federal Register publication date.

Regulators will decide whether a wellness incentive program is reasonably designed is based on consideration of all the relevant facts and circumstances, officials said.

But regulators may be more likely to accept a wellness incentive program if it is accredited or based on widely accepted clinical standards, officials said.

The IRS, EBSA and HHS developed the new group wellness program standards to implement Section 1201 of the Patient Protection and Affordable Care Act (PPACA). PPACA Section 1201 lets group health plans offer wellness programs, but it prohibits plans from using the programs to discriminate against people with health problems.

Officials noted in a discussion of group health plan wellness program regulations that the PPACA Section 1201 wellness program antidiscrimination rules apply mainly to “health-contingent” programs, or programs that tie financial incentives, such as premium discounts, to weight loss, actual avoidance of tobacco, and other changes in health factors.

The PPACA Section 1201 antidiscrimination rules do not apply to “participatory programs,” or programs that simply reward people for taking a class, filling out a questionnaire, or engaging in some other reasonable, nondiscriminiatory activity, officials said.

PPACA opponents are still fighting to repeal or block implementation of the law. If the PPACA insurance standards take effect as written and work as drafters expect, they will forbid health insurers from taking personal health information into account when deciding whether to issue coverage.

When insurers are pricing coverage, they will be able to use age and location when setting rates.

Insurers may also be able to vary premiums for group plan coverage by as much as 30 percent to reward enrollees for participating in health-contingent wellness programs.

Insurers may be able to vary premiums for group coverage as much as 50 percent to reward enrollees who are participating in programs designed to prevent or reduce tobacco use.

When group plans use health-contingent wellness programs, they must come up with reasonable alternatives for people who already have health problems or cannot participate in the main wellness program because of medical concerns, officials said.

Officials also talk briefly about individual health policy wellness programs.

The PPACA Section 1201 wellness incentive program standards do not apply to individual health insurance policies, officials said.

But officials made a point of saying in the preamble to the new rule that they believe health insurers can offer participatory wellness incentive programs for holders of individual policies.

“This is because participatory wellness programs do not base rewards on achieving a standard  related to a health factor, and thus do not discriminate based upon health status,” officials said.

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