State considers wellness incentives

Even as federal health reform ramps up incentives for corporate wellness programs, Connecticut lawmakers are considering doing the same.

Under the federal Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act, companies can now claim tax credits covering 30 percent of the cost of a wide range of healthy living programs they offer employees and their families, up from 20 percent under previous law. The U.S. Department of Health and Human Services is empowered to increase the benefit to half the cost of a health plan, if it deems such programs are significantly cutting the nation”™s overall cost of health care.

Michael Critelli, the former CEO of Stamford-based Pitney Bowes Inc. who is a frequent commentator on health issues, said Connecticut and other states have been slower than one might think to recognize the efficacy of such programs.

“The issue with small businesses is not their inherent inability to implement health benefit programs, but the rigid and misguided state insurance regulations that prohibit insurers from offering wellness incentives to the small business marketplace,” Critelli said, in a blog on which he has been tracking the health reform process. “That is starting to change, and I am pleased that Connecticut now allows its insurers to offer wellness incentives.”

Some lawmakers are attempting a bill in the Connecticut House of Representatives would require insurers to offer such programs while allowing rewards representing up to 20 percent of paid premiums, while allowing wide leeway for what form those rewards can take.

A separate Senate bill would allow companies to deduct up to $1 million from their state corporate taxes the cost of offering such programs, but has received scant attention as lawmakers struggle to narrow budget deficits.

The Connecticut Association of Health Plans opposes the House bill, while lauding the concept of corporate wellness programs.

“Our goal, as a managed care organization, is to provide a comprehensive meaningful set of benefits to individuals and employers purchasing our product,” said Christine Cappiello, director of government relations for Anthem Blue Cross Blue Shield, in testifying on the bill this spring in Hartford. “How we accomplish this goal changes as the needs and the desires of the market changes and mandating benefits take away the flexibility that insurers have in developing those products.”

Insurers may soon see increasing federal scrutiny of such opportunities. The federal health reform bill allots the U.S. Dept. of Health and Human Services wide latitude in promulgating regulations related to corporate wellness programs and benefits.
For now, HHS is putting together a $200 million, five-year grant program to assist businesses with fewer than 100 workers in setting up employer wellness programs, without immediately specifying details.

The federal government also plans to produce a marketing blitz geared toward encouraging workers to participate in such programs. And it will produce websites to help companies track the impact of such programs on their premiums and health spending, as well on absenteeism, productivity and other measures of employee contributions. Combined, the government is authorized to spend as much as $500 million getting the word out and providing online health management tools.

To qualify for the tax credit, wellness programs must be coordinated or delivered by a health-care provider; a wellness and prevention plan manager; or a health, wellness or prevention services organization that conducts health risk assessments or offers ongoing intervention efforts for each of the program”™s participants.

Covered activities include:

• smoking cessation;
• weight management;
• stress management;
• physical fitness;
• nutrition;
• heart disease prevention;
• diabetes prevention; and
• other forms of healthy lifestyle support.

As examples, programs eligible for reimbursement include employee dues for fitness center memberships; participation in an ongoing series of health seminars; diagnostic testing programs at the workplace; and co-payment or deductible waivers for the cost of certain preventative health visits, such as prenatal care.

The law also contains some notable prohibitions ”“ for instance, an employer may not take credit as a “wellness” initiative asking employees to disclose if they keep a gun at home.