ACA Facts: Wellness Programs

November 20, 2012

Wellness Programs 

The ACA implements several wellness related initiatives that are intended to improve and promote health and fitness in the workplace. Typically offered through an employer, the initiatives include diabetes management programs, weight loss programs, and preventative health screenings for enrollees in Medicare, Medicaid, and private coverage. In order to establish these comprehensive wellness programs, federal funding will be available to eligible employers between 2011 and 2015, until the grant funds are depleted. Additionally, under the ACA, employers may continue to offer "rewards" - such as discounts or rebates - to individuals who participate in a wellness program and meet health-related standards.

The ACA's provision relating to employer-sponsored wellness programs has created concern among disability and health advocates. The law codified regulatory changes established in 2006 to the Health Insurance Portability and Accountability Act of 1996 (HIPAA). As originally enacted, HIPAA prohibited group health plans from discriminating against members based on health status. However, the law contained a narrow exception for employer-sponsored wellness programs, allowing those group plans to give "wellness discounts" to program participants. The 2006 regulations were written to allow wellness discounts to be applied on the basis of health status and weaken the standards for what would constitute a bona fide wellness program. The ACA allows employers to vary each employee's health premium by up to 50%, rather than the previous limit of 20%. The concern arises because discounts paid to healthy employees could be financed through penalties or surcharges on those who are less healthy, making premiums unaffordable for those with chronic health conditions. Other concerns center around privacy issues and a lack of peer-reviewed research evidence documenting the validity of these premium "incentives". Several health organizations prepared a Frequently Asked Questions document for more information.