Exercise and wellness programs, information, tips and resources

Compliance with health insurance portability and accountability act (HIPAA) non-discrimination rules is a big challenge for health promotion programs.  The old rules were unclear about which incentives passed muster.

That’s all changed, with the rules established earlier this year by the DOL and U.S.  Treasury Department.  The rules themselves haven’t changed, but they’ve been clarified. Here’s what you need to know -

â..Participation incentives’ are fine

As long as you structure incentives as rewards for wellness participation, the new rules provide a lot of freedom. All of these are fine under health insurance portability and accountability act (HIPAA) -

o  reimbursing all or a portion of the cost of health club membership

o  financial rewards for undergoing health risk assessments so long as the reward is based on participation rather than test results

o  encouraging preventive care by waiving co-pays or deductibles for these services (i.e., well-baby visits or prenatal care)

o  reimbursing staff for the cost of smoking-cessation programs without regard to the result, and

o  offering rewards tied to staff members attending a monthly health education seminar or working with a wellness Coach.

Conditional rewards OK ifâ..

But what if you want to make the reward conditional on participants meeting specific health goals? Example - Workers who achieve a cholesterol count under 200 get a 20% reduction in the cost of their health plan contributions pending results of an annual cholesterol test.

The feds say it’s OK under health insurance portability and accountability act (HIPAA) to do this, too, but your plan must meet five additional requirements -

o  The reward can’t exceed 20 percent of the cost of employee-only (or, when you allow dependents to participate, employee-plus-dependent) coverage under your health plan.

o  The standards ought to be reasonable (e.g., you can’t limit rewards to folks who can run a marathon).  The rewards also can’t be used as a backhanded way to negatively single out certain workers (e.g., rewards for all non-diabetics).

o  Participants must’ve the opportunity to qualify for the reward at least once per year (e.g., a smoker who fails to quit this year gets another chance next year).

o  Rewards must be available to all “similarly situated individuals.” In other words, you can’t make a company-paid weight management program available to certain personnel but not others.

When, for medical reasons, it’s unreasonably difficult for an individual to satisfy conditions that are otherwise reasonable, you must offer an alternative. Example -  A pregnant staff member might not be able to meet certain standards, so you must offer her an alternative.

Negative incentives violate HIPAA

So what’s not allowed under HIPAA’s non-discrimination rules? Anything that punishes people  for their health conditions or health risks.

The rules prohibit companys from charging different premiums, contributions, co-pays or deductibles based on personal health factors like obesity or use of tobacco. Notwithstanding, it’s OK to reimburse these costs based on someone’s participation in your wellness program, without regard to success.

In addition, the feds have added an important new non-discrimination rule - Businesss’ medical programs can’t deny benefits for treatment of injuries resulting from a medical condition, even if the condition wasn’t diagnosed before the injury.

For example, some medical programs have a “suicide exclusion” that denies payment for treating self-inflicted wounds from a suicide try. Now let’s suppose the staff member suffers from clinical depression. Even if the depression was undiagnosed prior to the suicide try, it’s illegal for your plan to deny benefits to this staff member.

Ever set out to organize and dispose of old employee files and paperwork in the office? the job is tougher than it seems.

Best practice - Create a records retention policy as your first step. A host of federal and state laws specify how long you must retain pay- and benefits-related documents.

Compliance is essential when a current or former worker sues or the DOL, IRS or the state audits your records.

Here is a records-retention schedule recommended by employment lawyer Jacqueline McManus -

o  Retain for two years employee personnel files, including performance reviews and training.

o  Hold these for three years -  wage records, including time cards, base pay and overtime wage-rate calculations and records explaining wage diferentials for staff performing the same job, and hold I-9 forms for three years from hire date or one year after termination, whichever is later.

o  Keep these four years -  all Payroll documents, including - home address records, and all wage records, including weekly OT earnings, straight time pay, deductions, bonuses, pay period designations and payment dates.

o  Use a five-year retention window for employee health info like medical and first-aid records from on-the-job injuries, and alcohol and drug testing records.

o  Keep this benefits data for six years (or one year after plan termination) -  elections and enrollment forms, benefit change documents, and COBRA notices.

o  Retain 401(k) files indefinitely.

A lot of corporations attempt to reward personnel during the holidays. But be cautious -

There’s a common misbelief that the IRS considers gift cards worth $20 or less de minimus benefits and, consequently, they’re tax free. Unfortunately, that’s not true.  With few exceptions, the IRS considers nearly anything with cash value a taxable form of compensation.

Practically speaking, the IRS is unlikely to go after your firm or an worker over several small-value gift cards for which you withheld no taxes. But they could, specifically if your firm regularly hands out gift cards.

At some firms, those $5 to $20 cards can add up to a few thousand dollars worth of uncompensated taxes in a few years. Each $15 gift card would usually require about $5.55 withheld.

To be safe, you can use gift cards sparingly and pay the tax for the recipient. Or else you can educate folks proactively that Uncle Sam requires you to take out for taxes.

Read the fine print

Gift cards could be money-wasters or or morale-killers if workforce have a bad experience attempting to redeem them. Read the fine-print before you buy. Three common pitfalls to watch -

o  expiration dates. Some retailers offer cards that last forever. But many have expiration dates, rendering the cards worthless after a period of time

o  dormancy fees. A $50 card can end up worth only $40 at stores that deduct “dormancy fees” after a certain period of time, and

o  redemption fees. Some stores charge a fee for redeeming cards that can be used in multiple locations.

The good news -  There are some good deals out there. Business use of gift cards has doubled since 2001, and related sales bring in $20 billion a year to retailers. With such fierce competition, it pays to shop around.

In recent years, it’s become increasingly common for companys with as few as 200 workers to explore self-insurance. But beware of hidden traps.

If your corporation is weighing self-insurance â.” or has already taken it â.” here are three pitfalls that can create unexpected costs.

1. Unfavorable employee mix

It’s impossible to completely eliminate the risk of unexpected, high-dollar health claims. But here’s a guideline to decrease your risk. Health claim stats suggest the “ideal” employee population for a self-insured plan is predominately young, non-tobacco use and male.

Be aware that stop-loss insurance carriers often “laser” those workers considered higher risk. Lasering means that your business would’ve to pay out much more in claims for these workers before the stop-loss coverage kicks in.

2. Loss of network discounts

Some firms learned after the fact that going the self-insurance route caused them to lose providers’ network discounts they previously received under fully insured plans. When evaluating  plan vendors’ administration-only choices, ask -

o  Will the vendor’s network alliances work in your best interests, cost-wise?

o  Will the provider only oversee claim payments or negotiate to build the best provider network, quality-wise, for your employees.

Bottom line -  You ought to get the same kinds of plan designs, networks and discounts as a fully insured plan.

3. Wasteful reinsurance contracts

When the language of your reinsurance contract doesn’t match your health plan’s summary plan description, you may be paying for coverage you don’t need and can never use.

It’s also key to be sure your firm has enough money in reserve to cover run-out claims and other costs that may occur before reinsurance will cover payments. Best practice -  annual audits of your financial reserves.

Evidence-based medicine has become a large buzzword in healthcare over the last few years. But certain non-traditional treatments, like chiropractic care, might also prove effective in certain cases.

The key -  Using these treatments besides to â.” not instead of â.” conventional medicine may prove more cost-efficient in the long term.

What the latest research says

Do these five common complimentary treatments belong on your health plan? Here’s what recent research suggests -

1) Chiropractic care. Studies suggest these treatments may help cut absenteeism for workforce with uncomplicated lower back pain, namely for people  who’ve had it for less than a month.

2) Acupuncture. Research studies show acupuncture can help relieve osteoarthritis, chronic migraines, post-operative pain, low-back pain, fibromyalgia and carpal tunnel syndrome. There’s less evidence about its effectiveness as a tandem treatment for other conditions.

3) Acupressure. There’s no meaningful research to show this needle-free variation of acupuncture (a therapist applies pressure to specific points on the body) has the same medical benefits.

4) Biofeedback. As reported by the Mayo Clinic, there’s now some research to suggest this treatment can help with some kinds of chronic pain, specifically tension headaches and muscle pain.

Just how it works -  Monitors display a patient’s heart rate, breathing patterns, body temperature and muscle activity. A therapist then teaches the patient how to lower these readings via relaxation.

5) Aromatherapy.  As yet, there’s no evidence of direct medical benefits. While it can be a relaxing treatment to reduce stress, few firms â.” when any â.” foot the bill on employees’ behalf.

When an staff member ignores directions from a doctor, who’s responsible if the staff member causes a serious accident on the job?

In some cases, it’s your firm that ends up on the hook â.” both for workers’ comp and for other people ’s injuries caused by misuse of a prescription drug.

Situations like these raise three questions that even HR/benefits pros have trouble answering. Exactly how are you â.” or supervisors â.” supposed to know what meds individuals  are on and whether they’re taking them as directed by their physicians?

In most cases, you won’t.

Are you able to find out without violating HIPAA or other laws?

You can’t, unless the staff member volunteers the info or a physician notes the effects of medication being the reason for the accident.

So when you won’t know and can’t find out, how on earth can your firm be held responsible after the fact?

It all depends on the circumstances. Three key danger signs -

o  A supervisor already has knowledge of an employee’s health condition, when not the meds themselves. Example -  the employee requested a schedule change and said it was because of a particular health problem

o  The individuals has a history of erratic behavior that management suspects is medication-related, and/or

o  The employee’s job involves potentially perilous situations.

Spotting possible danger

A Florida case (Johnson v. Rentway) is a classic example of the two of the three big danger signs.

1.  The supervisor knew an staff member had insulin-dependent diabetes.

2.  The staff member was under doctor’s orders to take insulin at specific times, which required the organization to adjust the employee’s schedule.

But due to short staffing, the employee was often forced to work shifts that overlapped with times he was supposed to take injections.

What’s more, the staff member worked a potentially dangerous job (he was a specialist truck driver).

Finally, the inevitable happpened.  The staff member suffered a diabetic blackout at the wheel, causing a serious crash that injured himself and another driver.

The employee filed for workers’ comp, and the injured driver sued the business.  The firm fought â.” and lostâ.” both cases. Total cost -  $5 million.

Having even one problem drinker on your medical plan - including a covered family member with abuse issues â.” can cost your business big.

Some estimates place the potential cost as high as $35,000 a year per case. What’ your company’s risk?

A lot of health promotion programs are geared toward managing employees’ health risks associated with illnesses like diabetes or asthma.

But unless the health promotion program is integrated with an employee assistance program (EAP), chances are alcohol abuse-related risks go undetected. Here are two strategies that’re getting good results.

1. Include alcohol in health screenings

If you already sponsor confidential staff member health-risk assessments, it’s easy to screen for alcohol risks, too. This can be as simple as making sure three questions are added to the current appraisal -

o  Just how often do you have a drink containing alcohol?

o  Just how many alcoholic drinks do you’ve on a average day? And

o  Just how often in the last month have you’d six or more drinks?

For male staff, more than 14 drinks per week, or one or more episodes of heavy drinking suggests a possible problem. for women, more than seven drinks in a week, or one or more episodes of drinking four or more drinks, is a red flag.

Alternative - When you don’t offer appraisals, you can refer workforce to a free, confidential web-based screening.

Benchmarking tools

A lot of experts say drug-free workplace policies and worker assistance programs (EAPs) are the two most proven solutions within companies’ grasp for minimizing the risks and costs of alcohol abuse by health plan enrollees.

To see if sponsoring an employee assistance program makes financial sense, you are able to calculate your own firm’s current cost risk for free here. Plug in your organization type, locale and number of workers.

You’ll get a customized estimate of yearly direct (absenteeism, disability, ER visits) and indirect (presenteeism, turnover) costs from alcohol misuse by a covered employee or family member.

To design a drug-free worksite policy â.” or check if your existing one is up to par and compliant with the law - more guidance is available here.

It’s easy to feel like your PBM holds all the power over you. In most cases, it does.

A landmark 2004 study compared what pharmacy benefits managers (PBMs) charge corporations’ plans to what they actually pay pharmacies.

Scientists found staggering overcharges - in particular for generic drugs. Regrettably, four years later, the situation has scarcely changed. All too often, PBMs improve their own bottom line at the expense of the plan sponsor’s.

Chances are, it’s your medical insurance provider - not yourself - who contracts with the PBM to administer the prescription drug portion of your health benefits.

So how can you feel confident your firm is getting the best value and service? Start by asking your health-plan broker these four questions about the current or prospective PBM.

1. How does the PBM calculate price?

A lot of PBMs gain hidden profits off your plan through a practice called “differential pricing,” says advisor Gerry Purcell.

In other words, the PBM pays one price to drug retailers and then sets a lesser discount off the average wholesale price (AWP) for your company’s plan. Example -

o  The PBM compensates the drugstore the AWP minus 18%

o  your plan and staff pay AWP minus 15 percent for meds, and

o  The PBM pockets the difference.

Now for some good news. You do have some leverage in this area. If your drug plan is covered underneath the ERISA umbrella, the PBM must disclose this info.

Ideally, you’ll find the rates are the same on both contracts. But when there’s differential pricing, insist your firm get the full discount.

2. What’s the PMPM?

One key cost figure PBMs can’t manipulate is the per-member-per-month (PMPM) cost of your plan. This number will show when your plan’s costs actually increased or lowered.

The PMPM is calculated by dividing the total costs spent by the number of workers enrolled in the drug plan.

It’s also a great tool for comparing different PBMs to see which is the most cost-efficient for the size of your company, says Peter Reed of Managed Benefits Strategies.

3. can we get rebates, too?

Some PBMs receive money from drug businesses that your brokers won’t tell you about - but could  be able to leverage to your plan’s advantage. Example - Many PBMs get rebate checks from drug businesses (typically 50 cents to $1.25 per claim) for helping increase the sales of their products.

When you push hard enough for it, your broker may able to work an arrangement where you either -

o  split rebates from your plan evenly, or

o  let the PBM keep the entire rebate in exchange for a price break on administrative fees.

Important -  Ask to determine all the payment types the PBM gets from the drug firms. Rebates are often couched in the form of grants or classified as access fees or formulary fees.

4. Just how do changes in the formulary work?

In most states, PBMs can change your plan’s list of approved medications without prior notice.

The problem -  PBMs often make mid-year switches that save them money, but may not save your organization or workers a dime.

Example - When the PBM adopts a mail-order-only coverage policy on a certain formulary drug, an staff member who needs same-day access to the medication might  be forced to pay full price for it at a drug store.

Meanwhile, your plan is still charged the formulary price.To avoid such unpleasant surprises, insist the PBM give written notice of formulary changes, including the addition of new generics.

The best staff member recognition practices are often the simplest.

Here is one that’s recently been adopted at the publishing corporation where I work -  a progam called “See something good, say something good.”  It’s a way for staff to bring positive attention to things that their coworkers, managers and the company’s different departments do well.

Precisely how it works -  the corporation provides colorful index cards, placing them conspicuously in a few widely traveled areas in the building. When staff and supervisors want to publically recognize someone else’s efforts, they are able to grab a card and fill it out. It takes very little time.

When the index card is filled out, the employee drops it into a wrapped box (there are two in the building).  The boxes are later collected and the cards displayed in a room the business uses periodically for meetings, presentations and quarterly employee appreciation events.

In order to build awareness and participation in “Say Something Good,” management put up fliers around the building, so individuals  from every department can see them, in addition to visitors and job applicants who’ve come in for interviews.

The health promotion program, which was originally thought up by the head of our product marketing and advertising division, does not cost anything apart from the cost of the index cards and paper. There’s minimal administration time, and it takes workforce only a moment or two to fill out a card on a fellow employee’s behalf.

But the return is tremendous, and the recognition possibilities are endless. It’s a good way to improve morale, encourage productivity and differentiate the corporation culture from work environments where the negative things seem to get the lion’s share of the attention.

When it comes to health promotion programs, it could be tough to get past all the hype. Here is how to avoid the three most common traps corporations fall into.

Trap #1.  The “one-size-fits-all” approach

For good reason, your organization does not simply copy other firms’ 401(k) plans or compensation designs. Yet, all too often, firms adopt ill-fitting health promotion programs based on things that have worked elsewhere.

Your CFO might have seen data on the cost savings other companys have achieved via certain wellness incentives. Or an old peer of your Chief Executive Officer (CEO) swears by the health promotion program at his or her own firm.

In response, the top brass pushes for a copycat health promotion program â.” for instance, offering use of tobacco cessation incentives.

That might  be a good idea, since tobacco use-related illnesses are a key driver of your company’s health care costs. But how can you be sure? is it good enough to have your personnel undergo a health risk assessment?

Generally, the answer is no.

Health risk assessments are a excellent starting place, but it’s often a mistake to stop there.  The assessments help you get a feel for what your employees’ baseline physical problems are before you try to design a health promotion program around them.

This creates rough outlines of what your health promotion program goals ought to be and where to target staff member programs. When you want the maximum bang for your wellness buck, you’ll have to dig a little deeper for information. Key places to look -

o  your organization’s medical-claims breakdown for the last three years

o  prescription-drug claims

o  employee absence information

o  EAP use

o  disability claims, and

o  employee demographics (workers’ ethnic, gender, age and dependent coverage status points to greater â.” and lesser â.” health risks associated with each category).

Trap #2. Leaving the wellness program on autopilot

Many wellness programs often get off to a good begin and then fizzle out. Businesss are left wondering what went wrong. Their mistake -  They failed to revisit the wellness program on an ongoing basis â.” at least every other year.

Why it’s crucial -  Your cost-drivers can easily shift as staff members come and go from the business.

Example -  This year, emphysema and other smoking illnesses might  be your largest cost driver. But two years from now, it might be obesity and diabetes.

Unless you continuously track the health promotion program and adjust your objectives as necessary, you could not be prepared to meet those new challenges.

Trap #3. Unrealistic expectations

Normally, it takes at least a year and a half for employers to break even on the cost of a health promotion program.  As a rule of thumb, the typical program cost per staff member per month to the employer is about $3 to $5.

If, after three years, you still aren’t seeing results, something went wrong. Currently, the benchmark Return On Investment after the third year of a health promotion program is $4 to $5 saved for every dollar spent.

Exactly how can you manage the cost in the short-term? In many cases, companys pass the cost of the health promotion program on to the staff members. for  instance, let’s say you want to roll out a health promotion program effective January 1 (or whatever your first day is of the new plan year).

You can roll that $3 to $5 per employee per month cost directly into the employee’s monthly share of their healthcare premium. That makes the health promotion program a budget-neutral expense for your business.

But remember -  You get what you pay for â.” both in time and money invested.  The less guesswork that’s involved in the planning and execution, the better the chance for success.