The new rage in wellness is building outcomes-based programs which, depending on how you look at it, either provide an incentive to those that take care of their health or penalizes those who are unhealthy.
For those not familiar with this concept, this incentive is offered (most often a discount in their insurance premium) for achievement of a certain health standard. You may get a $100 annual discount for having healthy levels of cholesterol, $100 for having healthy levels of glucose, $100 for healthy blood pressure, and so on. By building in such a strong incentive, companies are able to drive very high levels of program engagement; often more than 90 percent of eligible employees. Many in the wellness field applaud this trend, because we are fed up with the days of offering health programming only to see 20 percent of the population show up to participate. Even more infuriating is when you realize that most of that 20 percent are your healthiest employees that are coming to prove to each other which of them are the most fit.
There are other reasons this approach is gaining popularity at such a rapid rate (a recent Towers Watson study showed the use of penalties for health outcomes more than doubled from 2009 to 2011, rising from 8 percent to 19 percent, and is expected to double again by 2012). It is one of the only ways to provide a “thank you” to the 80 percent of the population that maintain their health well enough to only take 20 percent of your health care expenditures. It's also one of the only ways to provide a goal to the individualized portion of your wellness initiative that stresses achievement over activity. In many cases companies are also using it as a funding mechanism to help pay for programs that can help the employees get healthier; programs that in many cases could not fit into the budget otherwise.
There's a “dark side” to outcomes-based programs, however. While I'm not a lawyer and don’t ever pretend to give anyone legal advice, I have seen enough programs out there to know what is right and what's at least in the gray area. Below are rules that are laid out in the HIPAA guidelines and some of the requests or program recommendations that we have seen in the market that I have recommended against implementing.
In the end, the risk associated with running these programs falls on the employer, so they need to carefully examine whether they want to put their neck out and test the waters on some of these examples. In every case, whether the group moved forward with the program or not, the recommendation was to consult with their risk management department and legal counsel before implementing anything that could put them at risk.
Below are some of the specific rules laid out in the HIPAA guidelines along with examples of companies that attempted to build programs that may not fit well within these rules.
1) The wellness program is reasonably designed to promote health or prevent disease
Recently a prospective client approached me and asked to put together an outcomes program in pretty short order. Everything was progressing fine until I heard their “idea” of how the points were to be structured for the program. They chose eight different criteria in which their employees could qualify for their incentive.
The first red flag was that two factors were actually mental health conditions. This isn’t the main point of this example, but building in mental health conditions is a very slippery slope. Questions arise such as, “How is this person being diagnosed?” and “Is this something they could have avoided or treated in any way?” This alone could have put a halt to this process. To add to the situation, this group required that each person qualify for every factor in order to earn any of the incentive. While no more than 30 percent of the US population would be out of range for any single factor, there is a miniscule number of people that would qualify for every single one, especially when they included eight factors.
It became abundantly clear that this group had no intention of using their wellness program to promote health or prevent disease. They were using the law to shift the cost of their health plan to their employees under the guise of a wellness program, while not looking like they were choosing to put more of the expense in their employee’s laps. This is not what the HIPAA exceptions intended in any way and is actually a lot more like what the original HIPAA nondiscrimination law was trying to prevent.
2) Offer the same opportunities to similarly situated employees
Make sure you are able to offer the same standard of measurement to all people that are willing to participate. What does this mean? Well take an instance where a group had onsite health screenings for all of their employees. Each employee that participated received a full blood draw, height, weight and blood pressure measurements. This group also offered offsite screenings at a lab facility for their sales staff. The problem was that the sales staff was not able to get a blood pressure measurement at the lab facility. The employer was totally set on offering an outcomes-based program based on five health metrics, one being blood pressure.
In this case it made it unusually burdensome for about half of their employee population (the sales people) to have to go to a lab and go to a doctor to get a note showing their blood pressure. The better direction for the employer may have been to give up the idea of offering one of their outcomes on blood pressure and stick with the four that were easily able to be measured in their entire population.
A similar case a group wanted to offer a waiver for some of their employees to exempt them from having to achieve some of the goals. This is generally not a path you want to go down. It gets back to the original HIPAA law that prohibits charging an individual a higher premium than a similarly situated individual based on a health factor. If one person has the factor measured and the other does not, you are toeing this line a little too closely.
3) Offer reasonable alternative
Many groups decide to offer an outcomes-based program and think they can snap their fingers and have the program produce a set percentage on non-qualifiers. While I would argue that you actually want zero non-qualifiers (meaning all of your employees are low risk to produce future health claims), the reality is that some companies rely on the additional dollars from non-qualifiers to fund their wellness initiatives. Not to mention that no company of any decent size is a utopian group of people in perfect health. So when these companies are relying on these dollars, there can actually be a short-sighted aggravated response when they realize that they have to provide a reasonable alternative to participants that can show it is unreasonably difficult or medically inadvisable to meet a specific health standard.
One group took this idea to another level. They wanted non-qualifiers and as such pushed to not include any information throughout the process describing the fact that a reasonable alternative is available. Well this wasn’t a gray area. They were promptly informed that this action would violate HIPAA law and they needed to disclose the existence of a reasonable alternative in all marketing material.
The reasonable alternative can work for you though, if you are interested in actually promoting health and changing behavior. You can provide a reasonable alternative even if a certain health standard is not unreasonable to meet. For example, you can provide a diabetes management or metabolic syndrome risk reduction program for anyone with elevated levels of glucose. This way all employees have the opportunity to earn the incentive by having healthy metrics or by engaging in a program to help improve that metric.