According to the Centers for Disease Control and Prevention, more than 75% of our health care spending is on premature and often preventable diseases like high blood pressure, diabetes and obesity. The growing numbers of preventable diseases, poor health habits and the rising cost of health-care have sparked an interest in employee wellness programs in the workplace for many organizations.
Americans working full-time spend an average of
one-third of their day, five days per week at the work. Since Americans spend a significant amount of their day at work, the workplace is an important setting for health promotion and disease prevention.
Studies have shown, wellness programs that implement
health-focused policies such as healthy eating, quitting tobacco use and reducing stress can significantly benefit employers and employees in many ways. Most employers who provide health insurance also provide some type of wellness benefit.
In November 2012, a proposed rule was issued for wellness programs that would become effective for plan years starting on or after January 1, 2015. The proposed rule divides wellness programs into two categories, “participatory wellness programs” and “health-contingent wellness programs.” The rule also increases an employer’s ability to reward employees who meet health goals by participating in health-contingent wellness programs.
Participatory wellness programs, do not require a person to meet any goal related to health status to receive a reward or incentive. Examples of these incentives include fitness center reimbursements, group challenges, weight-loss programs, on-site fitness centers and classes, or nutrition programs.
Health-contingent wellness programs, require a person to meet a health goal to obtain a reward. Rewards may be in the form of premium discounts or rebates, lower cost-sharing requirements, the absence of a surcharge, or extra benefits. Rewards for participating in a wellness program all depend on how the employer structures the program. An example of a health-contingent wellness program would be an employer that offered rewards for both meeting a cholesterol standard and for not using tobacco.
New regulations would increase the maximum permissible reward or incentive under a health-contingent wellness program from 20 percent to 30 percent of the cost of an employee’s insurance coverage – and up to 50 percent for programs designed to prevent or reduce tobacco use.
Example of a health-contingent wellness program and reward: Let’s say the total annual cost of an employee’s health insurance is $5,000. $2,500 was paid by the employer and $2,500 paid by the employee. The enrolled employee could receive a $1,500 reduction of their cost as a reward for having a total cholesterol level of less than 200 (30% reduction of $5,000). The program could also reduce the employee’s premium by an additional $1,000 if they had not used tobacco in the last year (add an additional 20% reduction of $5,000). The employee could potentially eliminate their out of pocket expense for health insurance if they met the wellness program requirements from the rewards they would receive (50% reduction of $5,000 = $2,500).
The proposed regulations enable employers the flexibility to be creative when designing a wellness program as long as they are designed to improve health or prevent disease and are not overly burdensome. The program must also provide a reasonable alternative for obtaining the reward for certain individuals. These individuals may include ones that have a disability or medical condition that makes meeting the initial standards difficult.
Wellness programs often improve overall employee well-being, job satisfaction and increase retention rates. Healthy employees tend to be happier and more productive employees, making wellness programs a win-win for both employers and employees.
At MM Hayes, our goal is to provide solutions to improve life at work. Our Quickcharge cashless payment solution can benefit a wellness program by encouraging and rewarding healthy eating habits at work. Through Quickcharge, organizations have the ability to establish loyalty programs which reward employees for making healthy eating choices. Employees earn points for purchasing nutritious options, and when an employee has accumulated enough points, he or she receives a credit toward their next purchase. To learn more about Quickcharge and how it can benefit your organization click here.
Does your company or organization currently have a wellness program in place? We would love to hear your thoughts on wellness programs and how effective they are in your workplace.
For more information regarding wellness programs and the Affordable Care Act visit healthcare.gov.