ACA Approved Wellness Programs
Approved wellness programs are part of many employer health plans, offering discounts and motives to people that meet health goals. Wellness plans haven’t been available to people that buy individual or family coverage.
The Department of Health and Human Services now has a test program to extend wellness benefits to the marketplace. Up to 10 states can participate in the first phase of the program, and more may follow.
The new program could save some people money on healthcare.
Approved Wellness Programs – A Popular but Controversial Trend
Wellness programs came with the passage of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). HIPAA made it illegal for group health plans to charge different premiums because of health; but, it did allow discounts for those in wellness programs.
Today, about 84% of large companies have a wellness plan, and about 41% provide an incentive to participate. Employers have these programs as a way to keep insurance costs down, reduce absenteeism, and improve job performance.
Wellness plans fall into three categories. Participatory programs encourage participation, such as offering a discount on a gym membership.
Activity-only plans reward enrollees for completing a health activity, such as a stop-smoking program or a health screening. The third kind of plan, outcome-based wellness program, give rewards to a specific health outcome, such as a lower body mass index.
Wellness plans are an excellent way to improve employee health, but studies show they’re not useful. Studies involving large employers shows that wellness plans haven’t led to a decrease in absences, better work, nor more excellent health.
Critics of the programs say, “they reward already heathy people and discriminate against people with pre-existing conditions.” Wellness plan rules have also been subject to a legal challenge over lack of privacy because employees must disclose health information to employers to avoid high premiums.
Individual Approved Wellness Programs and the ACA
One of the core principles of the ACA is that insurers can’t discriminate among beneficiaries because of health. Turning people away or forcing them to pay a higher premium because of pre-existing conditions isn’t acceptable.
Wellness plans were under the ACA programs that didn’t reward any factor to health status.
The new project expands wellness to include outcome-based programs. Under ACA rules, recipients can get a reward of up to 30 percent of premium costs if they engage in an application and obtain a specific health outcome, such as losing weight.
The bonus is up to 50 percent for programs that target tobacco use.
States can implement this wellness plan in one of two ways. States can establish general rules for wellness plans on the individual market.
Insurance companies then would follow those rules in designing programs. Alternatively, a state could establish an issuer project, where the state would set general guidelines but give insurance companies more leeway in creating wellness plans.
Rules to Prevent Discrimination
People criticize the new wellness plan as a “back door” way to discriminate against people due to health status, even though the ACA prohibits this type of discrimination. Critics fear that people whose health doesn’t allow them to participate in wellness programs or achieve health goals must pay higher premiums.
However, states will meet high standards in establishing approved wellness programs. The programs must promote health or wellness and can’t be an excuse to discriminate.
The full amount of the reward must be available to everyone at least once a year, and there must be options for people that can’t engage in an activity program. Also, companies will need to disclose alternate options for those that can’t meet the standards for an outcome-based plan.
Further, the programs can’t lead to a loss of coverage and can’t increase premium subsidies by the federal government under the ACA.
The program is new; it’s not clear which states will participate, or how they will start the program. Companies already have plans and rates for 2020; wellness benefits will be available by 2021.
The Future of Approved Wellness Programs and Insurance
If wellness plans encourage people to adopt and maintain healthier lifestyles, then everyone wins. Participants have lower insurance costs, improved quality of life, and lower healthcare costs overall.
Companies benefit from having fewer claims, and the nation benefits from a healthier population. Extending wellness benefits to the individual marketplace could be a good thing if they don’t lead to discrimination against people who have health issues.
Before you select a plan, think of all the health events that could occur in the next year. If you’re on Medicare, plan options vary.