The PPACA and Worksite Wellness: Opportunities and Challenges

How might the new Patient Protection and Affordable Care Act (PPACA)

impact the field of worksite wellness?  As a specialist in worksite wellness, it is hard for me to watch the implementation of the PPACA and to not think about its impact on the field of worksite wellness.  This article views the PPACA through a worksite wellness lens and contemplates the opportunities and challenges it might present for the worksite wellness community.

Provision: Mandated Coverage

New mandated coverage includes individual coverage, employer coverage, preventive services and dependent coverage.

Assessment and Implications

Since the new law does nothing to control health care costs and adds these and other new mandates and requirements to health insurance law, we will no doubt see continuing increases in the cost of health insurance. The increases will create a further incentive for employers to create worksite wellness programs.

The individual mandate should result in individuals gaining a greater appreciation for the costs associated with health care and what drives those costs.  This could result in an organized wellness revolution developing at the individual level.  This development could benefit worksite wellness in at least three ways:

1. Worksite wellness and individual wellness programs could partner for program delivery both at the worksite and community levels.
2. What is learned from individual wellness programs could be applied in worksite wellness programs.
3. The transition of worksite wellness away from its current population management approach to a more personalized, individualized approach.

The lengthening of the eligibility for dependent coverage could help to drive the expansion of worksite wellness programming beyond the individual employee and into the family setting.

Provision: Employer Penalties

While the PPACA does not explicitly mandate employers provide employees with health insurance coverage, beginning in 2014, large employers (50 or more full time equivalent employees) will be subject to penalties if one or more of their employees receives health insurance through an insurance exchange and receives a health insurance premium credit.   Employees would be eligible for a premium credit because their employer either does not provide health insurance or the employer’s health insurance is not affordable.   The determination of affordability is based on the employee’s costs exceeding 9.5% of their annual household income or the plan pays for less than 60% of the covered healthcare expenses.

Assessment and Implications

There is currently a lot of speculation as to how large employers will respond to this provision.  The basic question is: Will employers drop coverage and pay the fine or will they continue to offer health insurance as an employee benefit?  It will be interesting to watch and see what employers choose to do.   

The current interest and growth in worksite wellness is being driven by the ever increasing health insurance premium costs facing employers today.  Most employers view worksite wellness programs as a cost mitigation strategy, rather than an employee engagement strategy.  If employers drop health insurance coverage, this will definitely eliminate the core reason why employers initiate employee wellness programs.  Fortunately, because worksite wellness programs are just as important as an employee engagement strategy, worksite wellness programs will remain an important, core business strategy.

Provision: Small Employers

The PPACA provisions relating to small employers include tax credits for offering health insurance, the creation of small employer health insurance exchanges and the authorization of small employer wellness program grants.

Assessment and Implications

As the number of small employers offering health insurance increases, the likelihood these employers will initiate a worksite wellness program increases as well.  Program expansion at the small employer level will help to generate research and lessons learned which should lead to the development of evidence based small employer worksite wellness models and best practices.

Provision: Prevention

Qualified plans will be required to provide at a minimum, without cost sharing, preventive services rated A or B by the U.S. Preventive Services Task Force. 

Assessment and Implications

Preventing chronic diseases is a necessary strategy for controlling future health care costs.  Employers have a role in this strategy. This provision will create a great opportunity for worksite wellness programs to target preventive services, offer on site screenings and to run “Know Your Numbers” type campaigns.

Provision: Private Insurance

Under the law, private health insurance plans are required to spend 85% (in the large group market) and 80% (in the individual and small group markets) of the premium dollars collected on clinical and quality services.  The law also imposes on private insurance plans the same Market and Rating Rules established for the Insurance Exchanges. 

Assessment and Implications

As employer interest in worksite wellness grew, many employers started making demands of their insurance carrier to begin offering wellness related products and services.  In order to remain competitive, insurance companies began to offer these products and services.  Many employers have come to rely on insurance carriers to provide all or part of their wellness programming.  Unless wellness related services are considered to be clinical services, this could mean that insurance companies will have less money available for wellness related products and services.

Provision: Premium Discount

The law permits employers to offer up to a 30% premium discount, waiver of cost sharing requirement or benefits that would otherwise not be provided for participation in a wellness program and meeting certain health related standards.  The law also provides for the creation of 10 state pilot programs that will permit participating states to apply up to a 30% premium discount for individuals in the individual market who participate in wellness program.

Assessment and Implications

Research to date on incentive strategies has shown the premium discount to be a strong driver for wellness program participation. Raising the current allowable premium discount to 30% will create an even greater incentive and help to drive the use of the premium discount strategy by employers.  The pilot programs could add considerable knowledge about the use of various wellness programming elements such as best practices and behavior change.  

Provision: Health Insurance Exchanges

States will be allowed to create health insurance exchanges and co-ops in the individual and small group markets. As part of the Market and Rating Rules, health insurance premium rating can be based only on age, premium rating area, family composition and tobacco use.  A separate provision requires risk adjustment.

Assessment and Implications

To this non-insurance type author, it appears that these two provisions conflict.  It will be interesting to see how the regulators define required risk.  The implications here include a sharp increase in the demand for tobacco use cessation programs and services.  Lacking details yet to be developed, the rating provision appears to continue the current practice of “community rating” which means that individuals and small employers will pay health insurance premiums that cannot be adjusted by the adoption of healthy lifestyle practices or worksite wellness programs. 

Provision: Nutrition

Beginning in March of 2011, the law requires chain restaurants and food sold from vending machines to disclose the nutritional content of each item sold. 

Assessment and Implications

When the regulations for this provision kick in, there will no doubt be a lot of media attention.  This would be an ideal time for worksite wellness programs to roll out nutrition focused programming related to their own on-site food and vending services. 

Provision: Research, Planning and Technical Assistance

The law calls for the:

• Creation of the Patient Centered Research Institute
• Development of a national quality improvement strategy
• Establishment of a National Prevention, Health Promotion and Public Health Council
• Development of a national strategy to improve the nation’s health
• Creation of Preventive Services and Community Preventive Services Task Forces to develop, update and disseminate evidence based recommendations on the use of clinical and community prevention services
• Provision of technical assistance and other resources to evaluate employer based wellness programs
• Development and delivery of a national worksite health policies and programs survey

Assessment and Implications

Historically, worksite wellness and public health have been separate program and service delivery silos.  Employers play a large role in the health of a community.  There needs to be a stronger connection between worksite wellness and public health.  The worksite wellness field needs to be well represented on these new councils, task forces and institutes.  The worksite wellness field needs to be seen as an equal partner with public health in our efforts to improve the nation’s health.

The provision to evaluate employer based wellness programs will be a great opportunity for the worksite wellness community.  Worksite wellness practitioners have generally ignored program evaluation.  The technical assistance and resources made available will hopefully result in a greater emphasis being placed on program evaluation by practitioners in the future.

The worksite health policies and programs survey should give the worksite wellness community a good picture of where we stand today, as well as serving as a baseline from which to plan our future efforts.

Provision: Grant Funds

The new law authorizes the following grants:

• A Prevention and Public Health Fund
• A grant program to support the delivery of evidence based and community based prevention and wellness services
• A small employer wellness program grant fund

Assessment and Implications

Historically, worksite wellness has received limited government grant funding.  It is imperative that the worksite wellness community advocate for its fair share of these new funds.   

This article has pointed out numerous ways worksite wellness could and probably will be impacted by the PPACA. As regulatory agencies begin to draft the implementation regulations, the worksite wellness community needs to remain both vigilant and involved.  The worksite wellness community needs to make sure that both the new regulations and grant funding mechanisms reflect favorably on worksite wellness efforts and programs.

The worksite wellness field stands to gain much from this new law.  If, however, worksite wellness is not seen as an equal partner with communities in the wellness and prevention area, the worksite wellness field has much to lose as well.

About The Author

William McPeck, MSW, CWWPC, WLCP, is currently Director of Employee Health and Safety for Maine State Government.  Bill also currently serves as Chairman of the Maine Leadership Group on Worksite Wellness.  Bill is nationally certified as a Worksite Wellness Program Consultant, Work-Life Professional, Holistic Stress Management Trainer, Wellness Inventory Coach and Retirement Preparation Coach.  Available for trainings, consulting and coaching, Bill can be reached at: williammcpeck@gmail.com