Published on : January 15, 2014
Top 10 Strategies to Get the Most Out of the Affordable Care Act in 2014
When employees stay healthy, they do better work – and cost their companies less in health insurance payments, missed work and underperformance. That is why smart companies make serious investments in their workers’ health, well-being and productivity.
With the Affordable Care Act (ACA) in effect as of early 2014, many companies will be revisiting their approach to wellness. To help you understand the newly approved government regulationsthat define wellness programs under the Affordable Care Act, commonly known as Obamacare, we have outlined 10 strategies to help you design wellness programs that follow ACA guidelines, attract employee participation, and achieve measurable results.
Under the latest ACA regulations, companies can offer financial incentives of up to 30 percent(previously capped at 20 percent) of the total cost of coverage for meeting health-related standards. Additionally, smoking has been identified as such a major health risk that companies are allowed to offer incentives of up to 50 percentof the premium to reward people for not smoking.
Many are surprised to know that companies can tie 100 percent of thecost of benefits to participation in specific wellness screenings or activities – provided the same approach is offered for people in similar situations or with different health restrictions. By proactively identifying particular health issues that plague its employees – whether those include smoking or high blood pressure – companies can require employees to participate in activities or screenings that have been proven to reduce risk for these problems. That might be a smoking cessation program for a workplace with high smoking rates or encouraging flu shots for at-risk workers.
It’s important to broaden the scope of activities to reach all employees and consider company culture. Something as simple as taking a walking meeting or using a standing desk can be much more effective than, say, quarterly blood draws. One Limeade client saw healthcare cost inflation drop by 75 percentwhen they promoted meditation and deep breathing for stress management.
As before, wellness programs arestill divided into two categories: “participatory” or “health-contingent” categories, but now health-contingent programs are divided into two types. As the name suggests, participatory programs require only participation – like joining a gym or getting a flu shot. Health-contingent programs are divided into “activity-based” or “outcomes-based” – both of which can offer incentives. Activity-based programs encourage ongoing participation in healthy activities, like diet or exercise. Outcomes-based programs focus on having employees achieve a specific result, like target cholesterol or glucose levels. Companies should focus on creating a program that best fits their culture, as well as their employees’ health status and personal preferences, in order to increase participation and ensure measureable outcomes.
Since physical conditions vary from employee to employee, companies need to provide a “reasonable alternative standard” for people who may have trouble meeting particular wellness program requirements. This could mean rewarding milder forms of exercise for employees with physical limitations, or offering a cessation program to smokers if you reward people for not smoking. It’s important to recognize that “healthy” means different things for different people, and holding everyone to the same standard sets a program up for failure.
It’s always a good idea to recognize ANY improvements employees make – like rewarding those with extremely high blood pressure for simply loweringit, even if they don’t hit the standard target outcome. Sometimes, it’s not medically advisable – or even possible – for an employee to pursue a particular outcome, even with reasonable adjustments. In these situations, medical care (documented with a physician’s note) may be an acceptable alternative standard. This hearkens back to the Hippocratic oath “First, do no harm,” a central tenet for all healthcare workers.
Health benefits are extremely important to many people, especially those with medical conditions. When sharing health plan changes with employees, companies should speak honestly and simply. Helping employees understand what is changing and why can prevent anger, fear, stress, and complaints. On the bright side, if the program has been developed strategically, it will be easy to explain why changes have been made – to save money and improve health – and how they affect employees.
Every company has a different communication style. Whether employees prefer phone calls, emails, letters, or face-to-face talks, benefit communications should follow suit. They should also come from the right people – at least the manager or director level, and preferablythe CEO – to illustrate that wellness is a priority. In order to avoid a top-down or demanding approach, it’s great when managers and executive leadership can make a personal commitment to participate in wellness program activities and invite employees to join them.
Whether the current program needs to change due to rising healthcare costs, declining productivity, or weak team ties, employees deserve to know the reason and what they can do to help. While it’s not always necessary to reveal detailed financials, it’s a good idea to provide a sense of current healthcare costs and how the changes are expected to reduce them. Employees will be happier to participate if they understand the bottom line.
If employees have to reach certain individual goals as part of the wellness program, the company as a whole should have clear wellness goals. These could include a participation percentage, an employee engagement or well-being score, or a dollar amount for savings. Make sure employees understand this goal and receive regular progress updates.
Just as wellness program activities can be modified for employees with certain health conditions, the program itself should adapt to changing needs. You might need to accommodate an influx of junior or senior hires, or remote workers who need a different type of level of communications to feel connected. As the company changes, the wellness program should change too – without deviating too far from overall goals.
Ultimately, these new regulations offer a basic “carrot and stick” structure that enables a slightly more rational pricing of health insurance, creates opportunities for massive short- and long-term financial returns, and lets companies be intentional about building a healthy company, both financially and physically. By understanding legal regulations and carefully communicating changes in your own tone, you will build better wellness programs and companies.
Increase incentives as much as allowed.
Encourage participation in proven health and engagement activities.
Use participatory, health-contingent, activity-based, and outcomes-based programs the right way.
No double standards – just reasonable ones.
Focus on improvements, not failures – and never do harm.
Pick the right format for communication.
Include the reasons for change.
Set program goals.
Make modifications as needed.
About the Author
Henry Albrecht, founded Limeade in 2006, an industry-leading SaaS employee engagement company. Prior to being the founder and CEO of Limeade, Henry held product and marketing roles at companies such as Intuit. He earned his MBA from Northwestern’s Kellogg School of Management with an emphasis in technology and marketing, and graduated with honors from Claremont-McKenna College.