Over the past few months, there’s been some question as to whether companies can use monetary incentives to get employees to participate in different health benefit programs. It involved court cases, two conflicting landmark laws, and lots of time in Washington.
Now, we have some clarity – and it’s a big step in the right direction.
Late last week, the Equal Employment Opportunity Commission (EEOC) released a proposed rule clarifying how employers can use workplace wellness programs. Specifically, the proposed rule affirms what is in the Affordable Care Act (ACA): an employer can set a reward or penalty for participating in such a program as long as it’s no greater than 30 percent of what the employee pays for participation in their group health plan. It proposes to set out the requirements for “activity-only” or “outcome-based” health contingent wellness programs, clarifies what is meant by a “voluntary” program, and lays out how such programs will not be in violation of the Americans with Disabilities Act (ADA).
Some unanswered questions remain, such as if the incentives apply to group plans that cover dependents (spouses and family), but hopefully those questions will be answered by regulators in their final rule, due out in a few months. And make no mistake, this proposed rule gives employers the certainty they need to use these health benefits to improve employee health and reduce healthcare costs.
The challenge now is not a regulatory one; it is a management one. How do employers engage employees so they use these benefits? How do benefit managers make sure that employees are given the right incentives and for the right programs (it makes no sense to give a marathon runner a big incentive for an activity program!)? And how does a company manage all these different types of benefits, programs, and apps, so that they get the most out of them and know what works?
These are big questions, but ones that Jiff answers. That is this proposal is great for employers, because the door is now open for companies to tackle these issues, to provide better benefits to their employees, and to see a return on their investment and lower healthcare costs.