Yet again, the stage is set for another round of changes across the healthcare industry. For better or worse, healthcare is a constantly evolving marketplace – facing policy, economic, and clinical changes.
Much discussion since the 2016 presidential election and the Administration’s first actions have been focused on repealing and replacing the Affordable Care Act (ACA). For employers, an initial reaction is likely one of cautious attentiveness. It’s true that the ACA, particularly the portion under such scrutiny, largely deals with the private health insurance market. However, as we have noted previously, the ACA also has a number of direct impacts and provisions for the employer healthcare market. The ACA gave employers a valuable tool to both help improve employee health and keep costs in check, via the use of incentives to encourage healthy employee behavior.
The ACA expanded employers’ ability to offer incentives and rewards for employees engaging in healthy behaviors and wellness programs. Under the law, employers are permitted to discount up to 30 percent of an employee’s (and their spouse’s) premium as an incentive or reward, and by 50 percent if smoking cessation programs are involved. This enables employers to offer benefits that cultivate a healthier workforce, ultimately reducing overall healthcare costs. This 30 percent provision gives employers a way to control costs that is employee-friendly. It enables them to add benefits, rather than take them away. It aligns employers and employee goals by creating a market for healthy behaviors where employees are rewarded for things that will improve their health and wellbeing.
Under the law, employers are permitted to discount up to 30 percent of an employee’s (and their spouse’s) premium as an incentive or reward, and by 50 percent if smoking cessation programs are involved.
This provision also lets employees pick the benefits that are most useful to them. With the explosion of digital health apps, tools, and services that has occurred in the last six years, employers have no shortage of new benefits to offer employees. This evolving industry now goes well beyond fitness trackers and wearables. Technology solutions for managing health now include: telemedicine services, which can connect employees to a doctor from their living room; biometric screenings, which reveal an employee’s baseline health to help them realize their health status and plan for their health goals; and chronic care management apps, such as Glooko which helps people manage their diabetes. Unique employees have unique needs, and wellness incentives encourage employees to pick the right mix of health tools instead of just relying on a one-size-fits-all benefits plan which can be inefficient and expensive.
With employers and their employees facing rising healthcare costs, no matter what the federal government’s decisions on healthcare, it is essential that the ACA’s benefits incentives rules remain. This will allow employers can control healthcare costs while also improving benefits value for their employees.
Without a clear timeline or details of an ACA replacement, among other adjustments occurring in the healthcare industry, employers are facing uncertainty. Regardless of what is decided, we must ensure the ACA’s benefits incentives continue. As a leader in the employer healthcare market we hope that the most effective tool granted to employers, health and wellness incentives, remain long after this round, and the next, of healthcare policy changes.