As one Obama administration agency made headlines Thursday by blessing wellness incentives, other regulators were quietly telling employers and insurers to restrain themselves.
The Equal Employment Opportunity Commission (EEOC) said employers can offer wellness incentives with a value equal to 30 percent of the health benefits package. Earlier, the EEOC had gone to court to object to what many benefits industry players viewed as ordinary, plain vanilla wellness programs.
But the U.S. Department of Labor, the U.S. Department of Health and Human Services (HHS), and the U.S. Treasury Department said in a collection of answers to frequently asked questions (FAQs) about the Patient Protection and Affordable Care Act (PPACA) — PPACA FAQs Part XXV — that any wellness programs must be designed to promote better enrollee behavior, not to discriminate against high-risk individuals, or high-risk group health prospects.
The Centers for Medicare & Medicaid Services (CMS) also posted a separate set of FAQ answers of its own on the wellness incentive issue.
The departments note in the introduction to their FAQs that PPACA requires a “health-contingent wellness program” to be “reasonably designed to promote health or prevent a disease.” A program “designed to dissuade or discourage enrollment in the plan or program by individuals who are sick or potentially have high claims experience will not be considered reasonably designed,” the departments say.
For a look at provisions that could attract the wrong kind of regulator attention, read on.
1. Making employees fill out long personal health information questionnaires without doing much to help them stop smoking or lose weight.
The departments say the amount of information a program collects has to have some correlation with the amount of help a program gives enrollees with losing weight, giving up tobacco use, or engaging in some other healthy behavior.
Otherwise, the program will flunk a PPACA rule that requires a health-contingent wellness program to have a reasonable chance of improving the enrollees’ health, the departments say.
2. Requiring employees to spend a great deal of time on wellness activities, or travel far to participate in wellness activities, to qualify for incentives.
Excessively narrow acute health care networks are getting regulators’ attention, and so are narrow wellness services networks.
“Programs that require unreasonable time commitments or travel may be considered overly burdensome,” the departments say.
3. Offering wellness programs that affect the underlying health coverage to some employers in a market, but not to others.
CMS makes this point in its own wellness program FAQ.
The agency warns against trying to offer a wellness-based program that affects the premiums, benefits, cost-sharing levels, provider networks or service areas associated with major medical coverage only to certain types of employer groups, such as employers in designated industry classifications.
PPACA requires insurers and employers to offer major medical benefits on a guaranteed-issue basis, but it does not require insurers and employers to offer other, “excepted benefits,” such as dental or vision benefits, on a guaranteed-issue basis.
That means insurers may be able to offer wellness-based premium discount programs packaged with dental insurance or disability insurance solely to bakeries, or solely to employers with at least 1,000 workers.
If an insurer wants to offer a wellness-based major medical premium discount program, “then the offering of the wellness program would be considered a part of the plan design,” CMS officials say. “That plan design must generally be made available to every employer in the state and market that applies for such coverage.”
An insurer cannot offer a wellness-based premium discount program linked to major medical coverage only for office workers, or only for some other limited class of workers or employers, officials say.