On the surface, the “Holy Grail” of sophisticated wellness and incentives programs are based on outcomes. This means that the individual gets rewarded for achieving a goal. For example, you can structure your incentives different ways. You could have a reward for enrollment (i.e., I register for a program). You could have a reward for activity (i.e., I talk to a nurse or watch a video online). You could have a reward for an outcome (i.e., I lose 10 pounds).
But, those have different implications in terms of structure. [Note: I’m not a lawyer or an accountant so don’t take this as legal advice.] I think Andrea Davis at Employee Benefit News did a good job of touching on this in her article “No Good Deed“.
I did have a chance to implement a large outcomes-based rewards program for 1/1/14 where we had to address a lot of these changes from the ACA. One of the key terms that she hits on is this idea of “Reasonable Alternative Standards”. This basically means that if you implement an outcomes based incentive program that people have to be able to get the same incentive without achieving the outcome. This seems to defeat the purpose in my mind.
I always used to say that it was like having a guard dog with no teeth. We implemented a very interesting program with lots of expectations, but there was a huge gapping loop hole. Everyone could apply for a Reasonable Alternative Standard and achieve the same payout without really doing much. Of course, most people don’t realize this, but this is why I would argue that people that aren’t healthy or engaged with their health programs at work would rather have these outcomes based programs.