The Affordable Care Act (ACA) mandates that payers and care providers ensure overall wellness of the insured. Employer-sponsored care is the primary source of coverage in the nation and payers have been forced to think hard about how to keep employees away from the physician’s office. The answer has surfaced in the form of better workplace wellness programs-this isn’t a new endeavor since employee wellness programs have existed for many years but the reforms have ensured that the approach is rather different this time.
Conventional Challenges among Workplace Wellness Programs
Conventionally, get-well-quick programs with implausible ROIs have been adopted across workplaces. These predictable offerings from the wellness industry create much doubt about the wisdom of such programs and the kind of tools used to measure their effectiveness. Healthcare reforms seek to create a workplace that practices and promotes healthier lifestyles among its employees, making them more productive along the way. There are no fixed solutions to finding out which program will yield actual wellness benefits.
The healthcare industry has been rather indifferent to using data for driving changes. This applies to employee wellness programs too where healthcare costs are expected to be around $11,188 per employee for 2013-14. This underlines the appalling performance of standard wellness programs that are repeated year-after-year with minimal upgrades. The problem lies in employers not evaluating the programs and lack of coordination in payer-employer relationships. As a result, the true cost of implementing a wellness program and its cost effectiveness is driven by speculation rather than indisputable facts/figures.
Without data tracking and analysis, actual savings derived from wellness programs remain elusive. Most payers struggle to provide proof that wellness dollars have actually helped to make employees healthier or increase their productivity. This indifferent approach is also found in implementing wellness programs. Recently, many wellness programs across the nation incorporated Accelerators-tracking devices that help to calculate activity levels among users.
They were also credited with evaluating accuracy of fitness regimens and motivating users to burn more calories. A recent research in New York showed that these devices aren’t very precise. For instance, most Accelerators were not able to decipher low-impact movements that burn calories. Some were unable to interpret high-impact activities like bicycling! Most insurers and employers never bothered to find out whether these devices were actually helping the employees lose or manage body weight.
This is an example of how an unproductive fitness trend was adopted without evaluating its actual performance. Employers typically spend more time in tracking incentives paid to participants rather than calculating ROI on their investments in wellness programs.
How do reforms affect employee wellness programs?
In accordance with the reforms, employees should be given a notice of opportunity to understand and qualify for wellness programs. Wellness programs should be explained in an easy-to-understand format. These programs shouldn’t be overtly challenging or present unreasonable targets. The health or fitness goals should be based on healthcare data or standards which can be proven or quoted to prove the program’s feasibility. The reforms also insist that employee wellness programs should not be burdensome on employees and ask them to make irrational changes to their lifestyle. For example, a wellness program rewarding employees for using the stairs rather than taking the elevator cannot be applied to those using wheelchairs. Other aspects of the ACA’s effect on wellness programs for employees include:
• Rise in Waiver Limits – proposed rules implemented as a part of the ACA have increased the maximum permissible limit for offering rewards in health-contingent wellness programs. Employees can be offered up to a 30 percent waiver on their total out-of-pocket expenses in a health plan. This figure can rise up to 50 percent for reducing usage of tobacco.
• More Accommodating Programs – the wellness program should be able to accommodate exceptions. For example, a wellness program might reward achieving and maintaining a body-weight value. However, this requirement should be waived for pregnant enrollees. Such participation should qualify for alternatives to ensure that the integrity of the wellness program is maintained.
• Freedom to Levy Penalties – the law doesn’t prohibit wellness plans from imposing penalties. Generally, penalization is seen as a major roadblock for motivating participation but sometimes penalties can help in increasing effectiveness of the program. For instance, a $300 surcharge can be applied to a diabetic participant’s premium if he fails to provide a weekly log of blood sugar levels. Here, a penalty can drive an employee towards developing practices that can help to avert the onset of a crisis.
• No Room for Discrimination – the healthcare law forbids any discrimination against people who present a higher propensity of health-related risks. Larger premiums or out-of-pocket contributions cannot be demanded from enrollees who have a family or personal history of chronic conditions or diseases that are expensive to manage.
Emerging Trends in Workplace Wellness Programs
Weight management programs are perhaps the best example of typical wellness programs that have prevailed in the last decade. These programs are found across most mid-sized and bigger organizations with payers offering similar incentives and engagement tools. However, participation levels and effectiveness of these programs remains abysmally low. Typically, most participants struggle to complete a year in the program. Those who complete the term often don’t present any serious reduction in body weight. They seldom have increased awareness about lifestyle habits that contribute to weight gain.
Now, a resurgence of sorts is being witnessed where wellness programs are being overhauled with the aim of actual gains. Recent industry trends suggest that payers and employers are now seriously considering greater collaboration. Creating better wellness programs needs inputs from fitness and employee behavior experts apart from research tools to decipher unhealthy behaviors among employees. Other emerging trends in this niche include:
– Patronage for Health-contingent Wellness Programs
In 2006, HIPAA regulations categorized workplace wellness programs into two types. This categorization is still used as an industry benchmark:
1. Participatory Wellness Programs – the more liberal of employee wellness programs, it doesn’t insist that participants achieve any health or fitness status to become eligible for token rewards. Here, participation is advocated and rewarded minimally without bothering about calculating outcomes.
2. Health-contingent Programs – the more contemporary and increasingly chosen form of employee wellness programs where enrollees are substantially rewarded for achieving clearly-communicated health or fitness goals and outcomes are carefully measured.
The proposed rules endorse participatory wellness programs too that have been functional for many years. Example of this includes incentives for joining a fitness center or gym or a small waiver on co-pays for regularly undergoing cholesterol screenings. However, these programs don’t address health problems unique to an individual. The engagement capabilities of such wellness programs are limited.
The convention of promoting wellness programs by offering token incentives is on its way out. It is being replaced by significantly higher incentives and new engagement factors as a part of Health-contingent Programs. Here, actual wellness outcomes are rewarded in the form of remarkably high premium discounts/rebates, removal of surcharges, provision of additional care benefits and lowered cost-sharing.
– More Smaller Businesses in the Fold of Wellness Programs
The norm so far suggests that bigger employers are more likely to offer wellness programs with substantial incentives. Smaller businesses have usually shied away from offering wellness programs since their coverage options are rather limited and very expensive. However, smaller businesses will have access to greatly-discounted health plans and subsidies once health insurance exchanges start operating. More employee wellness programs are expected in the near future, particularly in organizations with 100 or lesser employees.
– Customization Mixed with Caution for Achieving Organizational Wellness
Wellness programs should be able to address a range of healthcare challenges found across different employees. More payers are contemplating developing customized wellness programs. For instance, creating smaller groups within the same organization, where each group represents a specific health issue. Here, employees within an organization can be grouped on the basis of their health challenges such as obesity, diabetes, psychological illnesses or rehabilitation programs. Each group is offered a dedicated specialist (or an in-network physician) along with biometric targets to observe how employees are participating en route to their wellness goals.
At a time when workplaces are increasingly exploring every possible factor that can raise their employees’ performance and overall retention levels, the definition of wellness packages is fast changing. I often hear about workplaces getting creative to make their teams feel more attached to their offices. This includes everything from encouraging group lunching habits to free memberships of dating platforms and gyms. Do you agree with my viewpoint? I will present a follow-up to this discussion…soon!