Thursday, December 10, 2009
A core provision of the Act is to provide protection and certain standard plan provisions that almost every health care plan must meet. Similar to ERISA protections for retirementment plans, the Act extends these provisions with the thought of achieving affordable access and providing essential benefits to the covered members. (In reading the Act you may note that the various provisions of the Act are not always in a sequential order that make sense to the reader.)
To be a “qualified health benefits plan”, a plan must meet the provisions relating to: affordable coverage, essential benefits, and consumer protection. These three provisions apply to persons enrolled in an employer-based and individual plan. An individual is considered enrolled if the individual is a participant or beneficiary as defined by ERISA.
The Act does provide for a grace period allowing current employment-based health plans to meet the requirements of qualified health benefits plan. An exception is made for certain plans including those that cover a “specified disease or illness policy”, i.e., cancer, heart attack, accident, … etc. Would this also exempt all indemnity type limited medical plans? However, the Act makes it clear that specific disease or illness policies are “In no case shall an employment-based health plan … be treated as acceptable coverage under this division.” Lastly, the Act does permit high deductible health care plans with no apparent sunset provisions noted.
Individuals currently enrolled in an individual health care plan are ‘‘grandfathered” into their current health care plan. However, carriers may not allow new enrollees to enter the grandfathered plans except under certain conditions, i.e., new dependents. Does this mean that I can add a newborn but can I add a dependent that has lost coverage under another plan? What happens to the mother or father of that newborn who decides to become a stay-at-home parent? Any individual health care plan that is not grandfathered must be offered through a Health Insurance Exchange plan. The Act restricts premium increases by allowing a carrier to increase premiums only if it increases premium percentages for “all enrollees in the same risk group at the same rate”.
How will affordable coverage be maintained? Qualified health benefits plans will not be allowed to impose preexisting condition exclusions. Policies will be guaranteed issue, renewable, and cancellations will be prohibited, except in cases of non-payment and fraud. Policy pricing rules will allow for use of: age, geographical area, tier size (single, single + 1, … family), and actuarial value of optional services, i.e., dental, vision, … etc.
The Act prohibits discrimination in benefits; for mental health and substance abuse treatments. It attempts to ensure that provider networks are adequate, that members have internet access to plan information, and provides for an option of extended coverage for uninsured dependent children under the age of 27 and who are not otherwise enrolled in a health benefits plan. If the coverage offered under a qualified health care plan, decreases or the cost-sharing increases during the plan year, the carrier (and plan sponsor, i.e., employer) must inform members of the change within 90 days of the change or sooner to protect the health/ of the members.
Thursday, December 10, 2009
Wednesday, December 9, 2009
Interim Companion Guides, Including Operating Rules
Wednesday, December 09, 2009
It is common for regulatory agencies such as the Deptpartments of Labor, Health and Human Services, and the Internal Revenue Service to issue “temporary” or “interim” regulations, and operating guidelines, while final rules are being developed. Agencies are required to seek public input and issuance of temporary regulations allows for this public input process to take place. A department’s final regulations are often very closely aligned to its temporary regulations, after all, some “temporary” regulations are known to have been in place for years before being finalized.
The Act directs the Secretary of Health and Human Services to provide interim guidelines for Medicare Advantage plans that will include:
o a standardized data transaction format for submitting medical loss ratio data, eligibility, claims status, and other information to the Secretary by October 1, 2011.
Remember, the Act is mandating a medical loss ratio of not less than 85% for a health care plans. The medical loss ratio of a specific health care plan measures the proportion of premium dollars paid towards health care claims and does not include administrative and operating costs, i.e., expenses incurred by performing its normal business operations.
o the interim guidelines must take into consideration current and future legislation, i.e., ERISA, HIPPA, … etc.
Nothing in the Act exempts the Secretary of Health and Human Services or another Federal, state, or local governmental agency from abiding by any current or future legislation.
o operating rules for using and processing the standardized data transactions developed by the Secretary, including standards for first report of injury by January 1, 2014
Since one function of the Act is to reduce duplication of services and functions; standardizing how, when, where and by whom data transactions are executed would, in theory, move the health system towards lower administrative costs, improved delivery of health care, and lower claims costs over time.
o a unique health plan identifier by October 1, 2012
Currently, employer based health care plans that are subject to ERISA are identified by the Employer’s Identification Number (EIN, i.e., corporate tax ID number) plus a three deigit number such as: 501, 501, 503, … etc. Under the “unique health plan identifier”, I would expect that each type of plan (HMO, PPO, POS, … etc.) within an employer’s health care offering would an identifier specific to that offering. Individual plans also have a current identifier, since these plans as reviewed and approved by their respective states of domicile. However, the issue is that none of these current identifiers are “unique”, plus they may not tell the observer the type of plan, the state it is domiciled in, or the issuing carrier.
o expansion of penalties for violations by health plans (brokers, agents, and other parties in interest may also be included)
Unfortunately, without a threat of penalties, some health care providers and parties in interest may not be inclined to adhere to the guidelines.
Will all of this “standardization” result in lower costs, improved health care, greater access to care?
It is common for regulatory agencies such as the Deptpartments of Labor, Health and Human Services, and the Internal Revenue Service to issue “temporary” or “interim” regulations, and operating guidelines, while final rules are being developed. Agencies are required to seek public input and issuance of temporary regulations allows for this public input process to take place. A department’s final regulations are often very closely aligned to its temporary regulations, after all, some “temporary” regulations are known to have been in place for years before being finalized.
The Act directs the Secretary of Health and Human Services to provide interim guidelines for Medicare Advantage plans that will include:
o a standardized data transaction format for submitting medical loss ratio data, eligibility, claims status, and other information to the Secretary by October 1, 2011.
Remember, the Act is mandating a medical loss ratio of not less than 85% for a health care plans. The medical loss ratio of a specific health care plan measures the proportion of premium dollars paid towards health care claims and does not include administrative and operating costs, i.e., expenses incurred by performing its normal business operations.
o the interim guidelines must take into consideration current and future legislation, i.e., ERISA, HIPPA, … etc.
Nothing in the Act exempts the Secretary of Health and Human Services or another Federal, state, or local governmental agency from abiding by any current or future legislation.
o operating rules for using and processing the standardized data transactions developed by the Secretary, including standards for first report of injury by January 1, 2014
Since one function of the Act is to reduce duplication of services and functions; standardizing how, when, where and by whom data transactions are executed would, in theory, move the health system towards lower administrative costs, improved delivery of health care, and lower claims costs over time.
o a unique health plan identifier by October 1, 2012
Currently, employer based health care plans that are subject to ERISA are identified by the Employer’s Identification Number (EIN, i.e., corporate tax ID number) plus a three deigit number such as: 501, 501, 503, … etc. Under the “unique health plan identifier”, I would expect that each type of plan (HMO, PPO, POS, … etc.) within an employer’s health care offering would an identifier specific to that offering. Individual plans also have a current identifier, since these plans as reviewed and approved by their respective states of domicile. However, the issue is that none of these current identifiers are “unique”, plus they may not tell the observer the type of plan, the state it is domiciled in, or the issuing carrier.
o expansion of penalties for violations by health plans (brokers, agents, and other parties in interest may also be included)
Unfortunately, without a threat of penalties, some health care providers and parties in interest may not be inclined to adhere to the guidelines.
Will all of this “standardization” result in lower costs, improved health care, greater access to care?
Monday, December 7, 2009
Digitization of Patient and Financial Transactions
Monday, December 07, 2009
Over the last three decades virtually every major industry has reached some level of digitization of their manufacturing, logistic, inventory, sales, and service delivery systems. Products are routinely bar coded and radio tagged to optimize ordering, pricing, sales, inventory control, and shrinkage. So why shouldn't health care benefit from some of the same forms of technology?
The Act attempts to obtain a similar level of technology adoption by mandating, starting within two years and completed within five years, the digitization of patient health care data and the accompanying financial transactions.
The Act’s goals are to:
o be unique, no conflicting/standards
o permit no additions/constraints for transactions, including companion guides
o be comprehensive, efficient/robust, minimal paper transactions/clarification
o be real-time/near real-time in determination of financial responsibility/service eligibility
o use machine-readable health care ID cards
o allow near real-time adjudication of claims;
o provide electronic acknowledgment, response, and status reporting
o describe all data elements unambiguously
o harmonize common data elements
o require optional paper versions of transactions (Aren’t we trying to get rid of paper?)
o enable electronic funds transfers
o require timely/transparent claim adjudication
o require standard electronic member enrollment
While many health care providers currently have systems in place to conduct most enrollment, claims, and reporting activities electronically, at best, it can be said they are not standard across providers. In addition, the availability of “paperless” and “on-line” transaction and reporting may very by group size. A provider may not offer the same level of automation to a group of 25 as it does to a group of 250 members. Furthermore, those systems in place to manage Medicare, Medicaid, Tri-Care, and state-based CHIP plans may all have differing data standards, formats, and inter-faces.
To ease the burden of converting from their current data formats, the Act does provide for “incentives” to assist various providers. The Act specifically addresses incentives for providers who are “serving rural or underserved areas”. Finally, all of this automation must comply with any current privacy laws and as might be expected, the Act provides for its own enforcement through the use of audits and penalties.
What will it take to make all of this happen over the next 5 years? Most large carriers and providers have technology staffs who have the abilities to make the changes required in data standards, formats, and inter-faces, but will they have the capacity? How will this impact the small providers who have limited or no technology staffs? Who and how are the thousands of medical office staffs going to be trained to input these standard transactions?
Sunday, December 6, 2009
Simplification and Standardization of Electronic Administrative Transactions
Sunday, December 06, 2009
A common argument made of the American health care system is that it is too bureaucratic, cumbersome, dependent up on paper-based transactions, with duplication and overlap among and between the various health care providers and insurance carriers.
A personal example may serve to illustrate. I recently saw my primary care physician for a minor infection. I called the office to make an appointment since my physician does not permit on-line appointments. When I arrived for my appointment, the office staff visually reviewed my member ID card (non-machine readable), manually verified my coverage with the carrier on-line, and took my co-payment. Later, I was ushered into exam room where my medical concerns and vitals were taken and recorded on a laptop. My physician examined the finger, asked a few questions, and concluded the finger should be lanced and drained. After lancing and draining the finger and taking a sample to be analyzed, he wrote two prescription; and referred me to an orthopedic specialist for possible bone damage. I left the office, presented my two paper prescriptions to a pharmacist and had the two prescriptions filled.
A few days later I saw the orthopedic specialist who required a second co-payment (the staff wanted to under charge me for my co-pay), took the same vitals, asked the same questions, asked about any prescriptions, took an X-Ray, re-lanced and re-drained the finger, and finally concluded there is no damage to the bone.
Several weeks later, I received separate paper (some carriers provide on-line EOB’s) explanations of who I saw, what I was changed, what I paid, what was charged to my out-of-pocket expenses, and what the carrier paid to my primary care physician, orthopedic specialist, and any other providers.
In that process, all information was transmitted via paper with the exception of my phone call to initiate the appointment with my physician, manually verification of my coverage with the carrier, and the phone call from my physician to the specialist. If asked, my physician would have certainly called the two prescriptions into the pharmacist and they would have been waiting for me when I arrived at the pharmacy.
If I had analyzed that process looking to improve it, I would have found several opportunities to do so. Included, would have been initiation of on-line appointments, electronic verification of patient insurance information, and electronic transmission of patient information, X-rays, lab tests and results to other providers.
The Act proposes to simplify and standardize patient-provider interactions by requiring many to occur in real time (or near-real time) and permit patient, insurance, and claims information to be captured in standard electronic formats thus reducing or eliminating barriers to the sharing of information among and between carriers and/or providers. Hopefully, one outcome is the reduction in carrier and provider administrative costs. In addition, it is reasonable to expect increased levels of member and/or patient satisfaction, reduced errors, better utilization of resources, and more timely delivery of vital information such as laboratory results.
While there are several “devils” in the details; consider our banking system. I go to the store and pay for my purchase with my ATM card. The card has a magnetic strip that includes my basic banking information. In combination with the store’s sales system a transaction is created that determines if I have enough money to pay for my purchase, credits the store’s bank account, and updates the store’s inventory with my purchase. By the time I arrive home, my account information has been updated with my latest transaction.
While there are many opportunities to improve the current U.S. health care system through the digitization of patient and financial transactions why does it require a national mandate? The retail industry and others, did this many years ago, why do the economics at work in retail not apply to health care?
A common argument made of the American health care system is that it is too bureaucratic, cumbersome, dependent up on paper-based transactions, with duplication and overlap among and between the various health care providers and insurance carriers.
A personal example may serve to illustrate. I recently saw my primary care physician for a minor infection. I called the office to make an appointment since my physician does not permit on-line appointments. When I arrived for my appointment, the office staff visually reviewed my member ID card (non-machine readable), manually verified my coverage with the carrier on-line, and took my co-payment. Later, I was ushered into exam room where my medical concerns and vitals were taken and recorded on a laptop. My physician examined the finger, asked a few questions, and concluded the finger should be lanced and drained. After lancing and draining the finger and taking a sample to be analyzed, he wrote two prescription; and referred me to an orthopedic specialist for possible bone damage. I left the office, presented my two paper prescriptions to a pharmacist and had the two prescriptions filled.
A few days later I saw the orthopedic specialist who required a second co-payment (the staff wanted to under charge me for my co-pay), took the same vitals, asked the same questions, asked about any prescriptions, took an X-Ray, re-lanced and re-drained the finger, and finally concluded there is no damage to the bone.
Several weeks later, I received separate paper (some carriers provide on-line EOB’s) explanations of who I saw, what I was changed, what I paid, what was charged to my out-of-pocket expenses, and what the carrier paid to my primary care physician, orthopedic specialist, and any other providers.
In that process, all information was transmitted via paper with the exception of my phone call to initiate the appointment with my physician, manually verification of my coverage with the carrier, and the phone call from my physician to the specialist. If asked, my physician would have certainly called the two prescriptions into the pharmacist and they would have been waiting for me when I arrived at the pharmacy.
If I had analyzed that process looking to improve it, I would have found several opportunities to do so. Included, would have been initiation of on-line appointments, electronic verification of patient insurance information, and electronic transmission of patient information, X-rays, lab tests and results to other providers.
The Act proposes to simplify and standardize patient-provider interactions by requiring many to occur in real time (or near-real time) and permit patient, insurance, and claims information to be captured in standard electronic formats thus reducing or eliminating barriers to the sharing of information among and between carriers and/or providers. Hopefully, one outcome is the reduction in carrier and provider administrative costs. In addition, it is reasonable to expect increased levels of member and/or patient satisfaction, reduced errors, better utilization of resources, and more timely delivery of vital information such as laboratory results.
While there are several “devils” in the details; consider our banking system. I go to the store and pay for my purchase with my ATM card. The card has a magnetic strip that includes my basic banking information. In combination with the store’s sales system a transaction is created that determines if I have enough money to pay for my purchase, credits the store’s bank account, and updates the store’s inventory with my purchase. By the time I arrive home, my account information has been updated with my latest transaction.
While there are many opportunities to improve the current U.S. health care system through the digitization of patient and financial transactions why does it require a national mandate? The retail industry and others, did this many years ago, why do the economics at work in retail not apply to health care?
Friday, December 4, 2009
Federal Health Care Access Grants
Friday, December 04, 2009
The Affordable Health Care for America Act provides for grants (states have to match 20% of the grant) from the Secretary of Health and Human Services to establish health care programs for uninsured individuals within the respective states as a means of delivering affordable health care. States will have to demonstrate their ability to maintain these programs once the grants are exhausted.
Several different types of delivery programs are mentioned within the Act including: state insurance exchanges, community coverage, reinsurance plans, transparent marketplaces, automated enrollments, innovative strategies, and purchasing collaboratives.
1. State Insurance Exchanges: These are intended to design and develop new, hopefully less expensive, portable health care benefits for small employers and part-time/ seasonal workers.
2. Community Coverage Program: Intended to foster shared responsibility between employers, governmental or nonprofit entity, and the individual. Who or what are the nonprofit entities? Will there be a mix of charitable, religious, community service and/or philanthropic organizations?
3. Reinsurance Plan Program: Stop-Loss coverage designed to offset a portion of carrier losses in a certain “risk corridor”. What is a risk corridor? Will it work like a traditional stop-loss policy and reimburse losses at the individual and/or the aggregate levels? Will stop-loss premiums be paid by the sates, carriers, employers, members or some combination?
4. Transparent Marketplace Program: Designed to provide for a structured means for the sale of health insurance, possibly via a Web portal. Will it work like Massachusetts’ Health Connector website? (https://www.mahealthconnector.org/) For that segment of the population that does not have access or knowledge of the Internet, how will access be provided?
5. Automated Enrollment Program: Statewide or automated enrollment systems for public assistance programs. By “public assistance programs”, is the Act addressing AFDC, Food Stamps, and other “welfare” programs or is it directed at health insurance for the uninsured?
6. Innovative Strategies: Innovative strategies to provide low-income childless adults with health care. How are the health needs of “childless adults” different than adults with children, other than the fact they have children?
7. Purchasing Collaboratives: Business & consumer relationships that provide for direct contract purchase of health care services plan sponsors. Does this mean that a plan sponsor can purchase services directly from a specific medical provider(s) for their covered members? Would each plan sponsor have to negotiate independently of other plan sponsors with providers? Will this dilute the ability of insurance carriers to build and maintain discounted provider networks?
The Affordable Health Care for America Act provides for grants (states have to match 20% of the grant) from the Secretary of Health and Human Services to establish health care programs for uninsured individuals within the respective states as a means of delivering affordable health care. States will have to demonstrate their ability to maintain these programs once the grants are exhausted.
Several different types of delivery programs are mentioned within the Act including: state insurance exchanges, community coverage, reinsurance plans, transparent marketplaces, automated enrollments, innovative strategies, and purchasing collaboratives.
1. State Insurance Exchanges: These are intended to design and develop new, hopefully less expensive, portable health care benefits for small employers and part-time/ seasonal workers.
2. Community Coverage Program: Intended to foster shared responsibility between employers, governmental or nonprofit entity, and the individual. Who or what are the nonprofit entities? Will there be a mix of charitable, religious, community service and/or philanthropic organizations?
3. Reinsurance Plan Program: Stop-Loss coverage designed to offset a portion of carrier losses in a certain “risk corridor”. What is a risk corridor? Will it work like a traditional stop-loss policy and reimburse losses at the individual and/or the aggregate levels? Will stop-loss premiums be paid by the sates, carriers, employers, members or some combination?
4. Transparent Marketplace Program: Designed to provide for a structured means for the sale of health insurance, possibly via a Web portal. Will it work like Massachusetts’ Health Connector website? (https://www.mahealthconnector.org/) For that segment of the population that does not have access or knowledge of the Internet, how will access be provided?
5. Automated Enrollment Program: Statewide or automated enrollment systems for public assistance programs. By “public assistance programs”, is the Act addressing AFDC, Food Stamps, and other “welfare” programs or is it directed at health insurance for the uninsured?
6. Innovative Strategies: Innovative strategies to provide low-income childless adults with health care. How are the health needs of “childless adults” different than adults with children, other than the fact they have children?
7. Purchasing Collaboratives: Business & consumer relationships that provide for direct contract purchase of health care services plan sponsors. Does this mean that a plan sponsor can purchase services directly from a specific medical provider(s) for their covered members? Would each plan sponsor have to negotiate independently of other plan sponsors with providers? Will this dilute the ability of insurance carriers to build and maintain discounted provider networks?
Thursday, December 3, 2009
Extension of Cobra Continuation Coverage
Thursday, December 03, 2009
As you may recall, earlier this year, Congress passed a COBRA coverage extension and subsidy law as part of The American Recovery and Reinvestment Act of 2009 (ARRA). The Act provided for premium reductions and additional election opportunities for individuals who experienced a COBRA qualifying event after February 17, 2009.
COBRA qualified individuals paid 35% of their COBRA premiums and their former employer or plan sponsor paid the remaining 65%. Employers or plan sponsors were reimbursed for their portion of the COBRA premiums through a quarterly tax credit. The premium subsidy applied to coverage beginning on or after February 17, 2009 and lasted for up to nine months for the period from September 1, 2008 to December 31, 2009.
The result of ARRA was a large increase in the numbers of COBRA qualified individuals who enrolled in the COBRA coverage extension and the subsidy. Prior to the passage of ARRA, COBRA qualified individuals paid up to 102% of their health care premiums. Clearly, ARRA made COBRA more affordable to such individuals. By some accounts, COBRA enrollments doubled during the ARRA qualifying period.
There is current pending legislation in the Congress to extend ARRA. Three different bills are pending, one in the Senate (S2730) and two in the House (HR3930 & HR 3966). All three are under review by their respective committees. It is to be seen whether or not any of these three bills will be acted upon within the next few weeks.
In addition, the Affordable Health Care for America Act (H3962) extends COBRA coverage but only after the date of the Act’s enactment, i.e., January 1, 2010. The Act extends COBRA coverage until the “earlier of the date on which such individual becomes eligible … for health insurance coverage through the Health Insurance Exchange”. The Act removes any current state laws that bar COBRA qualified individuals from participating in a state’s “health benefits risk pool”. Furthermore, nothing in the Act addresses employer, plan sponsor or government subsidies or financial assistance to COBRA qualified individuals as part of this extension of coverage.
As you may recall, earlier this year, Congress passed a COBRA coverage extension and subsidy law as part of The American Recovery and Reinvestment Act of 2009 (ARRA). The Act provided for premium reductions and additional election opportunities for individuals who experienced a COBRA qualifying event after February 17, 2009.
COBRA qualified individuals paid 35% of their COBRA premiums and their former employer or plan sponsor paid the remaining 65%. Employers or plan sponsors were reimbursed for their portion of the COBRA premiums through a quarterly tax credit. The premium subsidy applied to coverage beginning on or after February 17, 2009 and lasted for up to nine months for the period from September 1, 2008 to December 31, 2009.
The result of ARRA was a large increase in the numbers of COBRA qualified individuals who enrolled in the COBRA coverage extension and the subsidy. Prior to the passage of ARRA, COBRA qualified individuals paid up to 102% of their health care premiums. Clearly, ARRA made COBRA more affordable to such individuals. By some accounts, COBRA enrollments doubled during the ARRA qualifying period.
There is current pending legislation in the Congress to extend ARRA. Three different bills are pending, one in the Senate (S2730) and two in the House (HR3930 & HR 3966). All three are under review by their respective committees. It is to be seen whether or not any of these three bills will be acted upon within the next few weeks.
In addition, the Affordable Health Care for America Act (H3962) extends COBRA coverage but only after the date of the Act’s enactment, i.e., January 1, 2010. The Act extends COBRA coverage until the “earlier of the date on which such individual becomes eligible … for health insurance coverage through the Health Insurance Exchange”. The Act removes any current state laws that bar COBRA qualified individuals from participating in a state’s “health benefits risk pool”. Furthermore, nothing in the Act addresses employer, plan sponsor or government subsidies or financial assistance to COBRA qualified individuals as part of this extension of coverage.
Tuesday, December 1, 2009
Can wellness programs stabilize or even reduce health care costs?
Thursday, November 30, 2009
I hope that everyone had a great Thanksgiving Day.
Those of us in HR engaged in the design, development, and management of employee health care plans have, long ago, come to understand the predominate factors in employee health care costs are associated with life style behaviors. These behaviors include substance abuse (both legal and illegal), nutrition/weight management and physical exercise, and mental health issues such as stress and depression.
The Act provides for “wellness program grants” to “small employers” (to be determined) to cover up to 50% of the cost (excluding food and the cost of health insurance) of a “qualified” wellness program in conjunction with an employment based health care plan. The grants are for up to a three (3) year period and are calculated by multiplying $150 times the number of employees (Are all employees of the employer or just those who are eligible and/or enrolled in the employer’s plan to be included?) up to a maximum of $50,000 for the entire grant period. (Are grants extendable or renewable?)
To be considered a qualified wellness program, the program must be “consistent with evidence-based research and best practices”, include “multiple, evidence-based strategies”, include “strategies which focus on prevention and support”, ensure programs are “culturally competent, physically and programmatically accessible”, and cover any three (3) of the following:
1. Health Awareness Component
A. Health Education
B. Health Screenings
2. Employee Engagement Component
3. Behavioral Change Component
A. Tobacco Use;
B. Obesity;
C. Stress Management;
D. Physical Fitness;
E. Nutrition;
F. Substance Abuse;
G. Depression; and
H. Mental Health Promotion
4. Supportive Environment Component
A. On-Site Policies
The Act requires that both the Secretaries of Health and Human Services and Labor certify that each wellness program is available to all employees of the employer, no mandate that employees participate, and may include a financial incentive to participate in the program. The financial incentive cannot be tied to the premium or cost sharing of the individual under the health benefits plan. (No reduced premiums, deductibles or out-of-pocket expenses.)
As might be expected, data gathered under an employer wellness program can only be used for the administration the employer’s wellness program. The Secretaries will issue standards in the future to ensure that all employee protected health information remains confidential and used only for purposes of administering the program.
The Act requires the Secretaries to conduct an outreach program to inform employers of the availability of wellness grant programs, how to develop such programs, and how best to measure their outcomes.
I hope that everyone had a great Thanksgiving Day.
Those of us in HR engaged in the design, development, and management of employee health care plans have, long ago, come to understand the predominate factors in employee health care costs are associated with life style behaviors. These behaviors include substance abuse (both legal and illegal), nutrition/weight management and physical exercise, and mental health issues such as stress and depression.
The Act provides for “wellness program grants” to “small employers” (to be determined) to cover up to 50% of the cost (excluding food and the cost of health insurance) of a “qualified” wellness program in conjunction with an employment based health care plan. The grants are for up to a three (3) year period and are calculated by multiplying $150 times the number of employees (Are all employees of the employer or just those who are eligible and/or enrolled in the employer’s plan to be included?) up to a maximum of $50,000 for the entire grant period. (Are grants extendable or renewable?)
To be considered a qualified wellness program, the program must be “consistent with evidence-based research and best practices”, include “multiple, evidence-based strategies”, include “strategies which focus on prevention and support”, ensure programs are “culturally competent, physically and programmatically accessible”, and cover any three (3) of the following:
1. Health Awareness Component
A. Health Education
B. Health Screenings
2. Employee Engagement Component
3. Behavioral Change Component
A. Tobacco Use;
B. Obesity;
C. Stress Management;
D. Physical Fitness;
E. Nutrition;
F. Substance Abuse;
G. Depression; and
H. Mental Health Promotion
4. Supportive Environment Component
A. On-Site Policies
The Act requires that both the Secretaries of Health and Human Services and Labor certify that each wellness program is available to all employees of the employer, no mandate that employees participate, and may include a financial incentive to participate in the program. The financial incentive cannot be tied to the premium or cost sharing of the individual under the health benefits plan. (No reduced premiums, deductibles or out-of-pocket expenses.)
As might be expected, data gathered under an employer wellness program can only be used for the administration the employer’s wellness program. The Secretaries will issue standards in the future to ensure that all employee protected health information remains confidential and used only for purposes of administering the program.
The Act requires the Secretaries to conduct an outreach program to inform employers of the availability of wellness grant programs, how to develop such programs, and how best to measure their outcomes.
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