Protests Killing Wellness Incentives in the Healthcare Bill

Incentive: News

Protests Killing Wellness Incentives in the Healthcare Bill
January 27, 2010

By Donna M. Airoldi

When the Incentive Federation industry group headed to Capitol Hill in October to lobby for inclusion of a wellness incentives clause in the controversial health-care bill, it met with concern that these programs would be discriminatory and end up shifting costs to the very segment of the workforce that the legislation is trying to help, namely individuals who struggle to afford coverage to begin with.

Those concerns are now public since several individuals and health care organizations, including the American Heart Association and AARP, signed a letter protesting the proposed incentive inclusion in the bill and urged lawmakers to have it removed.

[Essentially, these concerns are from people who don't understand the difference between the tangible, in-kind incentive awards the legislation contemplated and cash rebates, which it didn't. The latter, opponents fear, could be used as a back-door way to to offer healthier (that is, younger) employees lower cost health insurance.]

“When we talked to people in Senator [Charles] Schumer’s office and Representative [Kathy] Dahlkemper, who’s a nutritionist, they were concerned about this very issue,” says George Delta, executive director of the Federation. “The last thing we want is anything that’s discriminatory. That goes against our interest. But you have to distinguish between cash and non-cash incentives.”

Currently companies are allowed to offer incentives tied to voluntary wellness programs or for meeting certain benchmarks, as allowed under the Health Insurance Portability and Accountability Act. The value of those inducements cannot be worth more than 20 percent of the employer’s cost of insurance coverage for the employee. The clause in the bill proposed by the Senate would raise that figure to 30 percent, and possibly to 50 percent if approved by the government. People with medical conditions would be precluded from participating.

Protesters argue that companies could raise rates first for everyone, then reimburse those employees who met certain health-related goals, thereby resulting in higher premiums, often unaffordable, for those who fail to meet those goals.

“On a fundamental level, if you start giving deeper discounts to employees because they live a particular way, it creates too much possibly to discriminate against higher risk groups. So there is some truth to that concept,” says Delta. “But then they’re no longer talking about incentives, they’re talking about cash rebates. We favor more of in-kind benefits that can be used to provide everyone an opportunity to improve his or her lifestyle.”

It’s not likely the clause will remain in the current bill, though the Federation group is still hoping for a “Hail Mary it’ll get in there.” If not, they’ll “look for a jobs bill or tax bill that’s less politically charged to codify the concept of in-kind incentives so that just like with safety programs, you can give [employees] up to $400 in tax-free benefits to participate,” says Delta. “We want the same benefits for qualified wellness programs. That’s still our position.”

The Federation group is meeting again in the next few days before the Incentive Marketing Association meeting in early February to go over what the next steps should be.

“Many peoples’ hearts are in the right place. We don’t want to discriminate, but could these programs be used that way? Probably, human nature being what it is,” says Delta. “There’s lots of room for broad interpretation. We’ll see whether we have any luck, but we’re trying.”

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