1. Healthcare Reform And Wellness
“Making sense of it all in 50 minutes”
Mike Demman
Chief Executive Officer
SimplyWell LLC

2. Agenda
Overview of final wellness regulations under Affordable Care Act

3. Disclaimer
The information contained herein should not be construed as legal advice, and readers should not act upon such information without the advice of counsel. The author makes no representations, nor guarantees regarding the contents of the information contained herein.

4. How did we get here? 1996 HIPAA Enacted
2006 HIPAA amended to include Non Discrimination Wellness provisions
Mar Patient Protection and Affordable Care Act (ACA) enacted with proposed effective date of January 1, 2014
Nov Federal register published a notice of rules as it relates to nondiscriminatory wellness programs
June 3, Final Regulations Published as it relates to nondiscriminatory wellness programs

7. TWO OPTIONS

8. Consistent with the 2006 Regulations, the final regulations continue to divide wellness programs into two categories:
Participatory Wellness Programs
Health Contingent Wellness Programs

9. Participatory Wellness Programs
Participatory wellness programs are programs that either do not provide a reward or do not include any conditions for obtaining a reward that are based on an individual satisfying a standard related to a health factor.
Consistent with the 2006 rules, participatory wellness programs are NOT required to meet the requirements applicable to health contingent wellness programs.

10. Health Contingent Wellness Programs
Health contingent wellness programs are programs that provide a reward or require conditions for obtaining a reward (premium incentive or surcharge) on an individual satisfying a standard related to a health factor.

11. NEW!
Health Contingent Wellness Programs have now been subcategorized into: 1. Activity-Based Wellness Programs 2. Outcomes-Based Wellness Programs

12. Health Contingent Activity-Based Wellness Programs
Type of health contingent program that requires an individual to perform or complete an activity related to a health factor in order to obtain a reward but DOES NOT require an individual to attain a specific outcome. Example If a participant does not meet a health factor (i.e. BMI), then the participant must participate in a walking program in order to receive the incentive.

13. Health Contingent Outcomes-Based Wellness Programs
Type of health contingent program that requires an individual to attain or maintain a specific health outcome in order to obtain a reward. Example If a participant does not meet a health factor (i.e. BMI), then the participant must show improvement over a reasonable period of time in order to receive the incentive.

14. Five Requirements for Health Contingent Wellness Programs
Effective January 1, 2014
Program is reasonably designed to promote health or prevent disease
Program gives individuals an opportunity to qualify for the reward at least once per year
The size of the reward does not exceed 30% of the employee only coverage and can be increased an additional 20% (for a total of 50%) to the extent the additional percentage is attributed to tobacco use prevention or reduction*
Uniform availability and reasonable alternative standards*
Appropriate plan disclosures*
*Changes from 2006 regulations

15. Requirement 1
Program is reasonably designed to promote health or prevent disease Same for Activity-Based and Outcomes-Based Health Contingent Wellness Programs

16. Requirement 2
The program gives individuals an opportunity to qualify for the reward at least once per year Same for Activity-Based and Outcomes-Based Health Contingent Wellness Programs

17. Requirement 3
The size of the reward does not exceed 30% of the employee only coverage and can be increased an additional 20% (for a total of 50%) to the extent the additional percentage is attributed to tobacco use prevention or reduction Same for Activity-Based and Outcomes-Based Health Contingent Wellness Programs

18. Requirement 4
Reasonable Alternative Standard
NEW! Reasonable Alternative Standard must be provided to ALL individuals who do not meet the initial standard Differs for Activity-Based and Outcomes-Based Health Contingent Wellness Programs

19. Activity-Based Programs
Reasonable Alternative Standard Factors
Time commitment
If an educational program, plan must provide assistance in identifying it
If a diet program, plan must pay for cost of program, but not food
If an individual’s physician states that a plan standard is not medically appropriate the plan must provide a reasonable alternative standard that is consistent with physician recommendations
NEW RULE
Permissible to seek physician verification that a health factor makes it unreasonably difficult or medically inadvisable for the participant to attempt to satisfy the program

20. Outcomes-Based Programs
When the Reasonable Alternative Standard is improvement in a health factor
Factors to Consider
Length of time to make change
Must allow individual to request that alternative will be to comply with individual physician’s recommendations
NEW RULE
Impermissible to request individual to seek physician verification that
a health factor makes it unreasonably difficult or medically
inadvisable for the participant to attempt to satisfy the program

21. Notice of Reasonable Alternative Standard
Must disclose the availability of the reasonable alternative standard in plan materials
Department offered updated sample language
NEW RULE
Must provide contact information and statement that physician recommendations will be accommodated
For outcomes based programs, must include in any disclosure to individual that he/she did not satisfy the outcomes-based standard

22. Putting It All Together
Does the Wellness Program require individual to meet target health factor or offer incentive for participation?
If Yes
If No
HIPAA Non-Discrimination Rules Apply
HIPAA Non-Discrimination Rules Do Not Apply

23. Is Wellness Program a Health Contingent Program?
If Yes
HIPAA Non-Discrimination Rules Apply
Must give individuals opportunity to qualify once a year
Must disclose contact and alternative standards available
Limit on Reward is 30%/50% if additional 20% is for tobacco cessation
Reasonably designed to promote health or prevent disease

24. Is Health Contingent Program Activity-Based or Outcomes-Based?
Reasonable Alternative Standard Factors
Time to complete the activity
Medical Exclusion is Permissible
Plan must make programs available to all – (plan pays include cost of program)

25. Is Health Contingent Program Activity-Based or Outcomes-Based?
Reasonable Alternative Standard Factors
Time to achieve outcome
Allow individual to request that physician “joins in”
Plan must make available to all
Medical Exclusion is Impermissible

26. SCENARIOS

27. Activity-Based Wellness Program
Participant DOES NOT Qualify For Incentive – RAS
Incentive
HS 85 or better
5 pt improvement
Incentive begins January 2014
New Regulations Effective Jan 1, 2014
John Doe attends a screening and receives a Health Score of 75
John Doe attends a screening and receives a Health Score of 77.5
Secondary Reasonable Alternative Standard:
Medical Exclusion
October
October
2012
2013
2014
2015
Reasonable Alternative Standard
Receives incentive for 2014
Earn 10,000 wellness points
Participate in a program
Attend a Lunch & Learn

28. Outcomes-Based Wellness Program
Incentive
HS 85 or better
5 pt improvement
Incentive begins January 2014
Participant DOES NOT Qualify For Incentive – RAS
New Regulations Effective Jan 1, 2014
John Doe attends a screening and receives a Health Score of 75
John Doe attends a screening and receives a Health Score of 77.5
John Doe attends a screening and receives a Health Score of 80
Submit lab upload form by April 2014 OR
October
October
April
2012
2013
2014
2015
Does not qualify for 2014 incentive
5 point improvement from
2013 – 2014
THEREFORE
Incentive retrobacks to January 2014

29. Outcomes-Based Wellness Program
Incentive
HS 85 or better
5 pt improvement
Incentive begins January 2014
Participant DOES NOT Qualify For Incentive – RAS
New Regulations Effective Jan 1, 2014
John Doe attends a screening and receives a Health Score of 75
John Doe attends a screening and receives a Health Score of 77.5
John Doe attends a screening and receives a Health Score of 77.5
Submit lab upload form by April 2014 OR
October
October
April
2012
2013
2014
2015
Does not qualify for 2014 incentive
Only Qualifies for 2014 incentive with
Secondary RAS: Physician Engagement
Incentive retrobacks to January 2014

30. YMCA Rules Apply
“The intention of the Departments in these final regulations is that, regardless of the type of wellness program, every individual participating in the program should be able to receive the full amount of any reward or incentive, regardless of any health factor”
- Department of the Treasury

31. APPENDIX

32. Example 1
Facts
Employer sponsors a group health plan. The annual premium for employee-only coverage is $6,000 (employer pays $4,500 + employee contributes $1,500).
Example 1
Plan offers an incentive of $600 that is tied to a health outcome.
Conclusion
Program meets the requirement since the incentive does not exceed 30% of total annual employee only coverage, $1,800 (30% x $6000).
Source: Final regulations, Affordable Care Act

33. Example 2
Facts
Employer sponsors a group health plan. The annual premium for employee-only coverage is $6,000 (employer pays $4,500 + employee contributes $1,500).
Example 2
Plan imposes a $1,000 surcharge on employees who used tobacco in last 12 months and are not enrolled in a tobacco cessation program.
Conclusion
Program meets the requirements because the total amount of the incentive (absence of $1,000 surcharge) does not exceed 50% of total annual employee only coverage ($3000) (50% x $6000)
Source: Final regulations, Affordable Care Act

34. Example 3
Facts
Employer sponsors a group health plan. The annual premium for employee-only coverage is $6,000 (employer pays $4,500 + employee contributes $1,500).
Example 3
Plan offers an incentive of $600 that is tied to a health outcome, PLUS plan imposes a $2,000 surcharge on employees who used tobacco in last 12 months and are not enrolled in a tobacco cessation program.
Conclusion
Program meets the requirements because the total amount of the incentive ($2,600) does not exceed 50% of total annual employee only coverage ($3000) (50% x $6000) and the health outcomes incentive, $600 does not exceed the 30% requirement, $1800.
Source: Final regulations, Affordable Care Act

35. Example 4
Facts
Employer sponsors a group health plan. The annual premium for employee-only coverage is $5,000 (including employer + employee contributes).
Example 4
Plan offers an incentive of $250 for completing an HRA and screening and a $1,500 incentive that is tied to a health outcome.
Conclusion
Program meets the requirements even though the total amount of the incentive ($1,750) exceeds the 30% threshold ($1,500).
Only the amount that is tied to an outcomes based incentive is factored into the 30% threshold.
In this case, $1,500 is within the limits of the 30% threshold.
Source: Final regulations, Affordable Care Act

36. Chief Executive Officer
QUESTIONS?
Mike Demman
Chief Executive Officer
SimplyWell LLC
(402)