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.