Will You Be Charged More For Not Participating In Wellness Programs?

Thus, the major factors that insurance companies traditionally use to charge higher premiums – such as health status, the use of health services, and gender – will no longer be allowed under the ACA. However, the ACA does permit employment-based health plans to charge employees up to 30 percent more on their premiums (and potentially up to 50 percent more) if they fail to participate in a wellness program or meet specified health goals.  [From Kaiser document]

Traditionally, health plans and employers have rewarded consumers for taking some basic action (e.g., $100 for completing an HRA)…although some companies prefer penalties versus incentives.

At that same time, there is some evolution happening here with companies moving from simply paying for an action to requiring participation in a program (e.g., disease management).  The next step that a few companies are engaging in is actually incenting or penalizing consumers based on health outcomes.  This will certainly open some doors for legal challenges where people will argue that they are genetically pre-disposed to some factor that limits their ability to lose weight or lower their cholesterol or some other measure of health.

But, in one of the first legal challenges in FL, the court recently upheld the idea of rewarding (or penalizing) consumers based on taking a specific action (like completing a biometric screening).  With that, I expect companies will be more empowered to take advantage of the fact that under health reform they can charge consumers up to 30% more for their healthcare for either not participating or not achieving a specific health outcome.

With an average monthly premium of $468 per month of single person coverage and consumers paying an average of 21% of their healthcare costs (or $97 per month), this means that a consumer could pay an additional $29 per month (or $349 per year).  [If I interpret all of this correctly…if it’s 30% of the total health premium (not just the consumer’s share), then this jumps up dramatically.]

Not surprisingly, employees aren’t real excited about this.  In a survey by the National Business Group on Health, 62% oppose charging employees more for health coverage if they do not participate in wellness programs.  And, 68% oppose requiring employees to participate in a wellness program in order to qualify for health insurance.

And, according to the survey, the most effective cost control tactic was believed to be Consumer Driven Health Plans by 43% and wellness programs by 19% while 60% of employers plan to increase the premium paid by employees (i.e., cost shifting).

But, if companies throw out a life preserver (i.e., wellness program) to a drowing individual (i.e., unhealthy individual), why isn’t it a reasonable expectation that the individual has to grab it (i.e., participate in the program)?