Finance, fitness & federal reform: healthy lifestyles are being emphasized by many companies to reduce costs, and the new health care law includes grants for small employers to establish workplace wellness programs.

• Author: Pettey, Lynne M.
• Position: Benefits

In an effort to promote individual responsibility, reduce medical claims costs and improve productivity, many of today's employers are emphasizing healthy lifestyles by offering wellness programs to their employees. The new health law--the Patient Protection and Affordable Care Act--demonstrates the importance of a healthy workforce by offering wellness grants for small employers, raising the limits for rewards in wellness programs and mandating preventive coverage in most employer-sponsored medical plans. In response, financial executives should expect wellness programs to become a standard "benefit" offered to employees, with hopes of reducing spiraling health care costs.

Small Employer Wellness Grants

Beginning sometime this year, grants will be available for small employers to establish a new comprehensive workplace wellness program. Eligible employers must have fewer than 100 employees and no existing wellness program. To qualify for a grant, the employer's wellness program must include the following components:

* Health awareness initiatives including health education, preventive screenings and health risk assessments;

* Efforts to maximize employee engagement;

* Initiatives to change unhealthy behaviors and lifestyle choices including counseling, seminars, online programs and self-help materials; and

* Supportive environment factors including workplace policies to encourage healthy lifestyles, sound nutrition, increased physical activity and improved mental health.

The federal agencies responsible for overseeing health care reform--including Health and Human Services (HHS) and the Department of Labor (DoL)--should be issuing regulatory guidance shortly for the grants including how to apply and the dollar amounts available.

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Program Rewards--With Limits

If an employer wants to offer rewards and incentives for meeting a health standard by discounting the employee's share of health plan costs, the employer must have a wellness program that promotes health and prevents disease. Otherwise, the health plan will violate nondiscrimination rules outlined in HIPAA (the Health Insurance Portability and Accountability Act of 1996), which prohibit basing group health plan benefits or contributions on an employee's health factor.

Health care reform is permitting employers to increase the financial incentives for employees to abandon unhealthy habits.

Today, employers that offer a wellness program with health-related standards can discount health plan contributions by 20 percent to...