Clean living, that’s what we need! Okay, maybe it’d be more accurate to say that one way to help rein in the cost of health care (and hence, health insurance) may be to more aggressively promote healthier lifestyles.
A fine and noble goal, of course, but how to encourage it?
More and more employers are looking to implement so-called “wellness” programs, and insurance carriers are in a unique position to help them do so. This can be as simple as on-site exercise rooms, or even cash incentives to lose weight or quit smoking.
But how do employers manage such programs, when HIPAA privacy rules make it so difficult to ascertain whom, exactly, has accomplished the stated goals?
Turns out, the relevant federal agencies (Departments of Labor and Health and Human Services, and the IRS) have recently published final guidelines for implementing these programs, while still complying with HIPAA’s privacy and nondiscrimination requirements.
For example, the guidelines state that employers may reward employees up to 20% of coverage costs for meeting health-related goals in their wellness programs, as long as those programs meet five requirements:
■ The total reward must not exceed 20% of the cost of employee-only coverage under the plan
■ The plan must be reasonably designed to promote health and prevent disease
■ Eligible employees must have the opportunity to qualify for the reward at least once per year
■ The reward must be available to all similarly situated individuals and provide a reasonable alternative standard for obtaining the reward to any individual who does not satisfy the initial standard
■ The plan must disclose the terms of the program and the availability of a reasonable alternative standard
HIPAA prohibits programs which deny employees eligibility for benefits (or which charge more for benefits) due to any health factor, including physical or mental illnesses, claims, medical history, or even genetic information. The new wording may help interested employers “work around” these restrictions, to (potentially) everyone’s benefit.
In general, I think that this is a positive step forward: we Americans do tend to favor our wallets, and if what it takes to make us healthy is to reward us financially, that seems to me to be a good thing. [LINK/MARTHA] On the other hand, this isn’t a panacea; that is, it won’t reduce health care (or health insurance) costs by degrees of magnitude. Still, I don’t see a down side to encouraging healthier behaviors and habits. Many insurance plans now include little “extras” (e.g. stop smoking programs, discounts to the gym, etc) which seek to promote healthier lifestyle choices. These don’t directly impact premiums, of course, but in the long run, they may help.
Happy New Year!
Henry Stern, LUTCF is an independent insurance agent in Dayton, OH. A licensed Continuing Education instructor for Ohio and Kentucky, he has well over 20 years of experience in “the biz.” He blogs every day (or so it seems) at InsureBlog.