Tuesday, July 30, 2013

Better Wellness Programs


Employers have tried several strategies to control health care costs. For example they have; reduced expensive plan options, shifted costs to employees, and reduced the number of employees eligible for benefits. However, many companies have experienced negative reactions to these strategies and worse; the cost of health care continues to climb.  As a result, employers appear to be turning toward wellness programs to promote a healthy workforce, hoping that this effort will improve productivity and contain health care expenses.

 However, “Wellness” is an often used, yet little understood term. For example, is wellness the same as health? Probably not. The definition of “health” as contained in the constitution of the World Health Organization is broad and culturally neutral. They define it as, “The state of complete physical, mental and social well-being and not merely the absence of disease or infirmity.” What this definition reflects is the state of an individual but the description fails to consider any individual commitment to healthy behavior, which is so crucial to wellness.

 HRA uses the following definition to describe a wellness programs: “Those activities embraced and practiced on a regular basis by an individual that will prevent, mitigate or correct problem health conditions, which would otherwise contribute to lost productivity and/or costly medical care”.

We believe that conditions such as: heart disease, distress, drug abuse, obesity, hypertension, and the loss of health due to tobacco use, can be prevented and even corrected. However, the individual who is experiencing a health risk must take the appropriate actions to overcome their unhealthy state. Therefore, a wellness program that simply makes things available (e.g. discount gym memberships) is not a relevant course of action. Furthermore, a wellness program that primarily appeals to people who would otherwise be healthy is also not relevant.

To be meaningful and of value, HRA sponsors wellness programs that target those conditions that are driving cost, are preventable and can respond positively to healthy behaviors.  Furthermore, we believe that an organization’s wellness program must take into account a host of company related factors in addition to the employee, including:

1.    The employee’s dependents

2.    The organization’s  insurance plan

3.    Company strategy, goals, objectives, policies and practices

4.    The firm’s accident prevention program

5.    Workers compensation practices and policies

6.    Absence management efforts

7.    Attendance policies

8.    The ERP program

9.    EE productivity measurements and incentives

10.  The cause for turnover at the company

11.  Recruitment challenges for the enterprise

12.  The degree of presenteeisim within the firm

13.  The firm’s commitment and involvement in the community as a corporate citizen

14.  The level of employee engagement

15.  A firm’s internal  practices regarding;  gain sharing, benchmarking, communication, progress reports, accountability, reinforcement and recognition practices

16.  The level of participation by the local health care community (doctors, heath care facilities, sources of education and information)

17.  Financial incentives, support programs, sponsorship or champions, and community collaboration.

18.  And possibly, even an extension of the wellness program and its objectives into the  contingent work force (temps, contractors, consultants, vendor staff)

Is a wellness program the answer to a vexing problem faced by both employees and employers? A comprehensive survey conducted by ADP and the results of numerous other investigations suggests that traditional wellness programs fall short of a panacea.
 
The Office of Disease Prevention and Health Promotion7, defines a comprehensive work site health promotion program as having five key elements.  Among a nationally representative sample of employers, only 6.9% reported that they had all five of these key elements in place.

 ADP’s survey2, finds that the wellness programs offered in midsized companies include an average of five programs or interventions and in large companies the average is six. Of these initiatives, Employee Assistance Programs (EAPs) are the most common component of a wellness program followed by health promotional materials and the practice of providing access to a nurse as the fifth most popular program.

 Furthermore, results from the same ADP survey state that only one-quarter of midsized companies and slightly more than one-fifth of large companies actually measure the ROI of their wellness programs.

The only conclusion that we can draw from this data is that the vast majority of wellness programs, no matter how well intended they may be, miss the mark. Sadly, the focus is on making an effort rather than striving for achievement or being accountable for the results.

 As a further illustration of our concern over traditional wellness programs, let me draw your attention to Biometric screenings, which most wellness programs encourage. The assumption is that such screenings will find illness at an early stage thereby saving both money and lives. However, a $40 biometric screen will find at best, one avoidable heart attack in every 4,000 people …at a cost of $160,000. Add in, company wellness incentives and the cost of time off from work to perform the test and you've now have created a very expensive and ineffective heart attack prevention screening experience.

Given the questionable practices, the absence of an ROI, the fuzzy focus on what wellness means, the tendency to focus on initiatives that promote healthy life style activities as opposed to results, all suggest that wellness offerings only appear to be of value to employers seeking to address problems associated with employee health, the rising cost of health care, workforce morale, staff productivity, employee retention and the attraction of talent.

2.The ADP Research Institute conducted the ADP HR / Benefits Pulse Survey on Wellness in October 2011.

7. Linnan L, Bowling M, Childress J, et al. Results of the 2004 national work site health promotion survey. Am J Public Health.2008;98(8):1503-1509.

If you would like to learn more about how to create and implement an effective wellness program for the benefit of employees and your organization, reach out to HRA by phone (818) 970 0730 or email us at hralliance@att.net.
 
 
From Michael Salisbury, Principal of the Human Resource Alliance (HRA) at www.hralliance.biz
 

Tuesday, July 9, 2013

Not Qualified For Obamacare's Subsidies? Just Lie


 
 
The following is an edited article from Forbes written by
Avik Roy, Contributor
If you thought the delay in the employer mandate was bad news for Obamacare, just wait. On Friday, Sarah Kliff and Sandhya Somashekhar of the Washington Post discovered that the Obama administration had buried in the Federal Register the announcement that the government won’t be able to verify whether or not applicants for Obamacare’s insurance exchange subsidies are actually qualified for the aid, in the 16 states that are setting up their own exchanges. Instead, until at least 2015, these states will be able to “accept the applicant’s attestation [regarding eligibility] without further verification.”

Without employer mandate, Feds to rely on applicant ‘attestations’

If you’ve been following the latest news around Obamacare, you know that on Tuesday evening, just before the Independence Day holiday, the White House announced that it would be delaying the implementation of the health law’s employer mandate—requiring all firms with more than 50 employees to provide health coverage to their workers—until 2015.

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I, and several others at the time, said “wait a minute.” According to the law, you aren’t eligible for Obamacare’s subsidies if your employer has offered you what the government considers “affordable” coverage. But if employers are no longer going to report whether or not they’ve offered “affordable” coverage, how can the government verify whether or not workers are eligible for subsidies?

Now we know the answer. The government is going with what Kliff and Somashekhar call “the honor system.” “We have concluded that the…proposed rule is not feasible for implementation for the first year of operations,” say the Centers for Medicare and Medicaid Services. “The exchange may accept the applicant’s attestation regarding enrollment in an eligible employer-sponsored plan…without further verification, instead of following the procedure in §155.320(d)(3)(iii).”

And it’s not just there. The feds will also allow people to gain means-tested subsidized coverage on the exchanges without having to…test their means. “For income verification, for the first year of operations, we are providing Exchanges with temporarily expanded discretion to accept an attestation of projected annual household income without further verification.”

Presumably, since the IRS knows your income, it could claw back these excess subsidies afterwards, if it chooses to. But the IRS’ record of impartiality is, shall we say, contested. And people who don’t file tax returns—such as those with incomes below the poverty line—would probably not be subject to that enforcement mechanism. That’s a route to enhanced benefits for poor residents of states that don’t expand Medicaid.

Subsidize first, ask questions later?

The goal here is plain as day. The Obama administration is laser-focused on making sure that enough Americans enroll onto Obamacare-subsidized health insurance platforms, because if they do, it will be politically impossible for Republicans to repeal Obamacare in the future.

Politics ain’t beanbag, they say. But deliberately encouraging tens of billions of dollars of waste, fraud, and abuse in order to achieve a political objective is profoundly immoral. It’s a breach of faith with the hard-working taxpayers whose paychecks are being harnessed to a cause many of them don’t support.

A key ramification of this announcement is what it means for uninsured people who were slated for Obamacare’s Medicaid expansion, who live in states that don’t expand Medicaid. Effectively, states no longer need to expand Medicaid, because this newly Medicaid-eligible population can now sign up for the exchanges, at no cost to the state, and know that their incomes won’t be verified by the IRS (because their incomes are too low to file tax returns).

That is to say, if your income is at 90 percent of the federal poverty level, and you live in Texas, where the state isn’t expanding Medicaid, all you have to do is write on the form that your income is actually 105 percent of FPL, and magically, you qualify for the exchange. I could easily envision certain activist groups signing people up for coverage this way. The upshot is that it could dramatically increase exchange subsidy spending, but also lower pressure for the Medicaid expansion.

Fast, accurate income verification presents a particularly serious difficulty. For one thing, ObamaCare requires subsidies to be based on family income, not individual income. So the process will have to include multiple family income streams, which means the government will have to check spousal salaries when determining eligibility. Tax returns are the most obvious verification method, but tax returns reveal only what someone made last year. They don’t reflect the mid-year shifts that ObamaCare was intended to address, such as job losses that mean people can no longer obtain insurance through their employers and are newly eligible for subsidies. Yet states will have to create systems to account for such changes. “States are supposed to have data systems in place that can figure out this person’s income and if they’re qualified for federal subsidies and then apply that federal subsidy quickly to the plan of their choosing,” [James] Capretta says. “That is a monumental undertaking. I don’t think anyone has any earthly idea how this is going to happen.”

Sharon Begley of Reuters quotes a number of experts who say that “the IRS will have a hard time policing that sort of conduct” [misrepresenting one's eligibility for exchange subsidies]:
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 “The shift of employees to the exchanges could cost (the government) a boatload,” said Nicholas Bagley, a law professor at the University of Michigan. “Some people who are ineligible for subsidies, because their employer offers affordable insurance, may attempt to get subsidies on the exchanges. The IRS will have a hard time policing that sort of conduct.”

States running their own Obamacare exchanges are scrambling to figure out how to deal with the delay in the employer-reporting requirement.

California, said spokeswoman Anne Gonzales, “was planning to tap into information from large employers to verify employee health coverage. The exchange is currently evaluating how the delay in implementation of the large employer mandate will impact enrollment and verification.”

Of course, a good deal of the information Americans send the IRS, such as the value of the household goods they donated to the Salvation Army, already relies on the honor system.

“Obviously the government has made the decision that they’re willing to live with that,” said Kendra Roberson, a healthcare lawyer at law firm Covington & Burling LLP, referring to an honor system for these aspects of the 2010 Patient Protection and Affordable Care Act.

The honor system may force the government to leave even more money on the table. The law imposes a penalty of $95, or 1 percent of household income, on people who fail to obtain coverage. But those whose employer-sponsored policy is unaffordable – defined as more than 9.5 percent of household income for purposes of penalty assessment – do not have to pay the penalty even if they do not buy insurance.

To check whether someone is truly exempt, the IRS has to know whether the employer offers coverage and at what price.

“If the IRS doesn’t have information about the plans large employers offer, it will be very hard to verify that. It will be an honor system,” said Michigan’s Bagley. “It could cost the government some money” if individuals elude the penalty through error or dishonesty.

It’s worth noting that this regulatory change applies to states that set up their own exchanges, not to the (mostly Republican-controlled) states that did not. In other words, the states that did what the Obama administration wanted them to do—set up their own exchanges—are the ones getting hosed here.