Wellness Programs Get Boost From the Government, Increased Scrutiny By Researchers

On June 3, several federal agencies issued a Final rule on nondiscriminatory wellness programs in group health plans. Expanding wellness programs is a key part of the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148). The Final rule, which amends existing regulations on wellness programs at 45 CFR 146.121, focuses on health contingent wellness programs, which are designed to reward individuals who meet specific standards relating to health. This can include not using or stopping the use of tobacco, weight loss programs, and cholesterol control programs. The final rule caps the reward for health contingent wellness programs at 30 percent of the total cost of the employee-only coverage under the plan. (See “HHS Releases Final Rules on Employment-Based Wellness Programs” for further details.)

Wellness Program Examples

A study from the U.S. Chamber of Commerce on challenges that businesses face in implementing the Affordable Care Act highlights what several employers are doing to promote wellness among employees. These programs from companies like Boeing, Dow, and Eli Lilly include free annual physical exams, an annual risk assessment survey, on-site fitness centers and subsidies for fitness club memberships, and regular presentations to employees on healthy lifestyles. The Chamber has recommended that the federal government should make it easier for Medicare Advantage plans to offer wellness incentives to beneficiaries who could benefit from any lower health costs seen by MA sponsors in the form of lower premiums and co-pays.

Wellness programs that offered a group-based financial incentive to lose weight were more effective than an individual incentive, according to a study published in the Annals of Internal Medicine. In this study, obese individuals could receive up to $100 per month for achieving certain weight loss goals, or a group of five individuals could split $500 for achieving the goals. If any member of the group didn’t meet the goal, members of the group who did meet the goals received a larger share of the $500 incentive. Group members lost three times as much weight as employees working individually, and kept more of the weight off three months later.

Still, the question, “Do wellness programs really work?” is under increased scrutiny by researchers.

Researchers at RAND Health determined that about 50 percent of all U.S. employers with 50 or more employees offer some sort of wellness program, most a combination of screening activities (self-administered questionnaires, clinical screenings, etc.) and preventive interventions (targeting employees with risk factors for chronic disease). RAND concluded that less than half of all employees take advantage of these programs, and the number drops even further for programs such as smoking cessation (7 percent participation by smokers), weight management (10 percent participation) and disease management (16 percent participation).

RAND did more in-depth case studies on five employers and determined that none of them had conducted a formal evaluation of the impact of their wellness programs on the employers’ overall spending on health care. RAND estimated that while participation in a wellness program over five years is associated with lower health care costs, the average annual difference per employee was a statistically insignificant $157.

A March 2013 study in the journal Health Affairs concluded that there was “little evidence that [wellness] programs can easily save costs through health improvement without being discriminatory.” Further, any savings to employers is likely to come from cost shifting from healthier employees to employees from lower socioeconomic levels who face higher health risks.

Another Health Affairs study looked at the wellness program offered by BJC Healthcare in St. Louis. It found that while there was a significant drop in hospitalizations for six conditions targeted by the program, this savings was basically offset by increases in spending for medications and outpatient visits.

So, while the Obama administration is encouraging the continued use and expansion of wellness programs, their long-term impact on companies’ bottom lines and employees’ health is still unclear.