Tag Archives: Wellness Program

Workplace Wellness Programs – Are They For You?

wellnessOne of the many provisions buried in the Affordable Care Act is the ability for employers to set up workplace wellness programs that incentivize employees to take better care of themselves. A healthier workforce doesn’t just reduce insurance premiums. It’s also a workforce that is more productive when it’s at work and that takes fewer days off when ill.

There are two different types of workplace wellness programs. A participatory wellness program is a program that provides a reward to employees that perform an action. Some examples of participatory programs include when a company provides access to a fitness center for anyone who chooses to use it, provides a bonus for taking a diagnostic test or incentivizes employees to attend health-related educational programs.

A workplace wellness plan can also be structured as a health-contingent program. These programs are more specifically based on employees’ individual health issues and can also come in two types:

  1. Activity-Based Health-Contingent Programs
  2. Outcome-Based Health-Contingent Programs

If a company chooses to implement a health-contingent program, it can offer a reward equivalent to up to 30 percent of an employee’s cost of health coverage. A program that is tied to stopping smoking can have a reward of up to 50 percent of a worker’s insurance coverage cost.

Activity-Based Workplace Wellness

An activity-based program is a program that focuses on getting an employee to take a certain activity towards improving their health. While a participatory program might include company support towards the cost of a gym membership, an activity-based program would require that worker to go to the gym on a predefined basis to earn the reward. Another example would be a reward tied to successfully completing a dieting program or committing to walk a certain number of times per week for a certain number of minutes per session.

Outcome-Based Workplace Wellness

Outcome-based programs focus on what a worker achieves rather than on what he does. An outcome-based plan starts with measuring a worker’s health. It can then set a goal for the measured standard. These programs can be tied to lowering cholesterol, lowering blood pressure or to reducing body-mass index. In these programs, the result is more important than the inputs that go into achieving it.

Calculating Rewards

Whether a company chooses an activity- or an outcome-based program, the rewards are calculated the same way. Rewards are based on the total cost of coverage, spanning both the employer’s and the employee’s payment .For instance, if an employee’s coverage costs $4,800 per year and the employer offers a 30 percent rebate, the employee would receive a bonus of $1,440. She would receive the bonus regardless of whether she pays $1,200, $2,400 or more of her total healthcare cost.

Alternate Routes to Rewards

Workplace wellness programs must comply with other federal laws, including the Americans with Disabilities Act. This means that they must have an alternate path for employees to earn a reward if they are unable to comply with the initial terms of a reward. For instance, an employee in a wheelchair won’t be able to participate in a program that incentivizes walking, so some other type of incentive must be put in place for them.

The rules underlying both activity- and outcome-based workplace wellness programs are complicated. Adding in the additional risks of legal exposure that come with creating incentives that are meaningful but also available to every employee makes the process even more challenging. However, the benefits to be reaped from a healthier workforce are also well worth it in the long run.

Dana Rostro is the Director of Employee Benefits Sales and Operations at Texas Associates Insurors. Dana is ACA certified and has helped clients develop the best strategies for their operations within the new healthcare legislation.

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Mistakes to Avoid With Employee Wellness Programs

Workplace wellness programs are an increasingly important part of the employee benefits program, designed to encourage employees to take steps to prevent the onset of worsening health conditions and eliminate unhealthy behaviours, through nutrition seminars and physical activity. While they are often touted a costly venture for employers, such investments can pay off handsomely for employers, by improving relationships, building work ethic and of course, cutting down financial costs long term.key person insurance

Whether you are thinking about Workplace Wellness for the first time, or indeed considering a revamp of your current initiative, understanding the common mistakes and misconceptions associated with Wellness programs can help you and your employees deliver the results.

No plan at all

It may seem like a no brainer, but having no wellness program is probably the biggest mistake you should avoid making. Workplace Wellness programs are something of a fresh fad and were not always considered a requirement for Businesses. While there is not currently any legislation binding companies to promote workplace wellness, it is something that Businesses consider to be an important part of their overall benefits plan, heading into the future.

Businesses that decide against the promotion of a preventative scheme will run the risk of missing out on building relationships within the workplace by making employees feel valued. At the end of the day, wellness programs are something you implement FOR the workforce, not something you do to them. Neglecting the growing demand for wellness in the workplace can leave businesses standing still when they could just as easily be moving forward.

Insufficient budget

There is no point in ignoring the fact that a successful wellness program will cost you. In order to see results, employers must be committed to their workforce and prepared to meet the financial requirements of Wellness initiatives. If you fail to provide adequate funding, your wellness initiative will automatically be doomed to failure.

Failing to sit down and assess the budgetary requirements of introducing a workplace wellness scheme is a common mistake that companies make when first approaching a workplace initiative. It is important to understand that a wellness initiative can be a major undertaking and will require adequate funding, staffing and resources to provide meaningful results. It is important for employers to persist and provide consistent funding, if required, so that the long-term future of your employees and employee benefit costs are manageable and guaranteed.

One size fits all approach

One of the most important considerations to make when assessing the requirements of your workplace wellness initiative and deciding what it should entail, is that no two workers are the same and therefore, adopting a ‘one size fits all approach’ is something worth avoiding. Some employees may be in a different condition of health than others. Some may smoke while some may not. It is important to tailor your plan to fit each individual employee and if that involves individual profiling, BMI and fitness testing, then so be it.

Many companies that introduce general wellness plans that hold the physical condition of each and every employee in the same regard will see participation levels drop. Considering participation is key to the success of the wellness program, low participation levels mean it’s time to rethink your initiative.

Wellness programs should also account for issues such as stress management as well as emotional and mental wellness in order to fully acknowledge the diverse needs of the workforce. By understanding those needs and the obstacles to watch out for, you can introduce an effective, cost-efficient – in the long run – wellness program that can help boost morale, working relationships, reputation and ultimately, productivity.

Need advice on how your Employee Benefits Program? Ask an expert for free.

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How Will Obamacare Affect My Wellness Program?

Beginning in 2014, the Affordable Care Act (ACA) imposes “pay or play” requirements on large employers. Under these rules, large employers that do not offer health coverage to their full-time employees and their dependents, or that offer coverage that is either unaffordable or does not provide minimum value, may be subject to a penalty. This penalty is also referred to as a “shared responsibility payment.”

On May 3, 2013, the Internal Revenue Service (IRS) released a proposed rule on ACA’s minimum value and affordability requirements. This proposed rule includes guidance on how health reimbursement arrangements (HRAs) and wellness program incentives are counted in determining the affordability of employer-sponsored coverage.

The regulation is not final. However, employers may rely on the proposed regulation until final regulations or other applicable guidance is issued.

Background

The affordability of any health coverage offered by a large employer is a key point in determining whether the employer will be subject to a shared responsibility penalty. The coverage is considered affordable if the employee’s required contribution to the plan for self-only coverage does not exceed 9.5 percent of the employee’s household income for the taxable year.

“Household income” means the modified adjusted gross income of the employee and any members of the employee’s family, including a spouse and dependents. The IRS established three safe harbors for employers to use, which measure affordability based on the employee’s W-2 wages, the employee’s rate of pay or the federal poverty level for a single individual.

HRA contributions and wellness program incentives

The proposed regulation includes special rules for determining how HRAs and wellness program incentives are counted in determining the affordability of eligible employer-sponsored coverage. Employer contributions to health savings accounts (HSAs) do not affect the affordability of employer-sponsored coverage because HSA amounts generally may not be used to pay for health insurance premiums.

HRA Contributions

The proposed rule provides that amounts made newly available under an HRA that is integrated with an eligible employer-sponsored plan for the current plan year are taken into account only in determining affordability if the employee may either:

  • Use the amounts only for premiums; or
  • Choose to use the amounts for either premiums or cost sharing.

Treating amounts that may be used either for premiums or cost-sharing only toward affordability prevents double counting the HRA amounts when assessing minimum value and affordability of eligible employer-sponsored coverage.

Wellness Program Incentives

The proposed rule also contains clarification on affordability when premiums may be affected by wellness programs. Under the proposal, the affordability of an employer-sponsored plan is determined by assuming that each employee fails to satisfy the wellness program’s requirements, unless the wellness program is related to tobacco use. This means the affordability of a plan that charges a higher initial premium for tobacco users will be determined based on the premium charged to non-tobacco users, or tobacco users who complete the related wellness program, such as attending smoking cessation classes.

Transition relief is provided in the proposed rule for plan years beginning before Jan. 1, 2015. Under this relief, if an employee receives a premium tax credit because an employer-sponsored health plan is unaffordable or does not provide minimum value, but the employer coverage would have been affordable or provided minimum value had the employee satisfied the requirements of a nondiscriminatory wellness program that was in effect on May 3, 2013, the employer will not be subject to the employer mandate penalty.

The transition relief applies for rewards expressed as either a dollar amount or a fraction of the total required employee premium contribution. Also, any required employee contribution to premium determined based upon assumed satisfaction of the requirements of a wellness program under this transition relief may be applied to the use of an affordability safe harbor.

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