Friday, October 9, 2009

Employer Wellness Programs Get Boosted And Blindsided In The Same Week

Pop Quiz: What do the following have in common?

--Carper Amendment #C2



The answer is employer-based wellness programs, and how these items are related tells a lot about the complications employee benefit plans will face in dealing with health reform.

So, what are these three related items?

Carper/Ensign Amendment # C2 is a provision added to America’s Healthy Futures Act, the Senate Finance Committee health reform bill that is scheduled for a vote next Tuesday. The provision would increase wellness program rewards from 20% to 30% of the cost of employee-only coverage under the plan, and it would allow the Secretaries of Health and Human Services, Department of Labor, and Department of the Treasury the discretion to increase the reward up to 50% of employee cost. This amendment was proposed by Sens. Thomas Carper (Del.) and John Ensign (Nev.) and passed by a vote of 18 to 4. The current 20% reward limit is a provision in the Health Insurance Portability and Accountability Act (HIPAA).

Safeway, the grocery store chain, operates a wellness program called Healthy Measures that uses the existing HIPAA wellness provisions to provide rewards of up to $1,560 per year for an employee and spouse who don’t smoke and keep to specified levels of body mass index, blood pressure, cholesterol and blood sugar. The Safeway Program has been cited as the source for the Carper/Ensign amendment.

"It's a pretty simple formula, said Safeway CEO Steve Burd in a radio interview. Very few companies have done it, for one reason or another, and you know, we're confident that the nation could adopt a similar formula if the legislation gets written correctly," says Burd. "And you could not only reverse the obesity trends, you can reverse the cost curve as well."

According to Mr. Burd, Safeway has kept its costs flat for the past five years. He argues that if similar programs were implemented across the nation, health care spending would be drastically reduced.

Despite what appears to be an enormous success withy strong Congressional support, the Safeway program does have its critics, who argue that Safeway's health care savings have not been independently verified, that such a program discriminates against those who may be less healthy, and that that corporate wellness programs often administer surveys that ask employees personal questions that invade one’s privacy.

GINA. The privacy question brings us to GINA, the Genetic Information Nondiscrimination Act, for which regulations were issued on October 7.

According to these regulations, wellness programs that provide rewards for completing Health risk assessments that request genetic information, including family medical history, violate GINA. This is true even if rewards are not based on the outcome of the assessment, a plan design that is allowed under the 2006 final HIPAA nondiscrimination rules regarding wellness programs.

One law firm already has advised that “employers that sponsor any health or wellness program will need to review the plan documents and administration for compliance with these new rules prior to Jan. 1, 2010 for calendar year plans.”

Thus, the legislators give, but the regulators taketh away.


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