Enlightened companies start by identifying specific health risks that will drive future health care spending.
Dear Health Conscious:
Innovative companies want to encourage healthy behavior, but realize that off-the-shelf
wellness programs rarely produce results or a financial return. Enlightened companies
start by identifying specific health risks that will drive future health care spending.
Next, they evaluate various total health management opportunities and assess the
extent of behavior change required to reduce health risk, improve the management
of chronic disease and guide participants to higher-quality health care. Only then
do they develop population health management initiatives and specify the health
metrics.
Some organizations establish elaborate point-system incentive plans. They provide
taxable cash awards based on point totals for "easy-to-measure" health metrics:
not smoking, participating in fitness programs, wellness classes, wearing seatbelts,
completing health-risk appraisals, biometric screening, disease-management programs
(if a viable candidate), and so on.
Cash-based incentives tend to work well. For many workforces, a cash incentive
of $100 or more will enhance participation as long as there is no charge for the
wellness program activity. Other companies design health reimbursement arrangements
to permit tax-free receipt of the incentive, provided it is used for IRS-qualified
health care expenses.
One approach is to require employees and spouses to select an activity to improve
their health from a short list of qualifying activities. For wellness, they might
complete a health risk assessment or participate in a weight management program.
Those suffering from chronic illness might complete a telephone assessment with
the company’s disease management vendor, or actively participate in the disease
management program for three months. Participants who don’t complete the qualifying
health activity are subject to penalties, including potentially higher premiums
or cost sharing. Any program that includes a penalty has to meet the HIPAA standards
for wellness programs (see below).
Covering more of the cost of medical plan coverage for workers who comply with
the specific wellness plan requirements also is a popular strategy. Sometimes these
are simple arrangements with two medical plans. Examples of wellness program requirements
used for benefit plan differentiation may include completing a health risk appraisal
or participating in a disease management program.
Some companies are more subtle, designing incentives and keeping them separate
from their medical plan. Examples might include charging less money for healthy
foods in the company cafeteria than for other foods, providing access to fitness
centers near work or providing online information about health to employees.
Innovative companies initiate these programs with a "keep it simple" strategy
to maximize participation. The health metrics are not stagnant. The performance
bar can be raised going forward to improve health further. Incentive amounts are
adjusted to produce the desired health management results.
Designing these plans to comply with HIPAA wellness program requirements published
December 13, 2006, is very important. The federal Department of Labor provides an
easy-to-use checklist for designing a wellness program that meets the HIPAA
standards. Key considerations are that the value of the incentive/penalty cannot exceed 20
percent of the value of the medical coverage, and that reasonable alternative measurements
must be available for individuals who cannot satisfy the metric because of a medical
condition.
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Dear Workforce:
