Wellness programs and the ACA

Wellness programs and the ACA

The Affordable Care Act mandates that encourage employers to create wellness programs for staff members. The United States Department of Labor explains that the goal is to improve the health of citizens in the United States, which will hopefully reduce healthcare spending in the near future. 

HR professionals and benefits managers should understand the ACA's provisions for wellness programs before the act goes into effect on January 1, 2014. The following is a summary of the ACA's provisions for wellness programs.

Financial incentives for employees
A key factor in motivating businesses to offer wellness programs is the value of the incentives that can be offered to employees for participation. The DOL states that the ACA has increased the maximum reward that enterprises can offer for "a health-contingent wellness program from 20 percent to 30 percent of the cost of health coverage." This means that companies can provide participating staff members with a 30 percent discount on their group health insurance premiums, bills and other expenses. Additionally, rewards can be increased to 50 percent when programs are designed to reduce tobacco usage among workers. 

The basics of wellness programs
In order to create an ACA-compliant wellness program, employers must adhere to specific standards set forth by the federal government. According to the DOL, the initiatives must be designed to improve health or combat preventable conditions and "reasonably designed" for all employees with alternatives for qualifying employees. A notification system must also be included so workers understand how to earn their rewards. 

Participatory vs health-contingent programs
Participatory and health-contingent wellness programs are the two primary approaches that are defined by the ACA. The goals of the two strategies are inherently the same, but include different approaches. 

According to the National Small Business Association, a participatory wellness program is one that doesn't include any type of incentive or require employees to meet certain health standards in order to earn rewards. These types of programs do not have to meet the ACA's standards because they don't include rewards. 

Health-contingent programs are essentially the opposite in that they include rewards and must comply with the healthcare law's provisions. HR and benefits professionals must ensure that their plans match the ACA's guidelines to avoid potential issues. 

Potential benefits for employers
Finally, employers can also benefit from wellness programs. The Houston Chronicle reports that some insurance providers grant discounts to companies that are actively trying to improve their employees' health. Ultimately, this positively impacts a business' bottom line and lowers healthcare costs for staff members. 

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