WASBO Fall Conference 10/02/2014

Transcription

1 BIOMETRICS AND STRATEGIC WELLNESS PLANNING Presented by: Al Jaeger, CEBS Senior Benefits Consultant, SVP Mardi Burns, CHC Senior Benefits Consultant, SVP Bret McKitrick, JD HR Consultant, VP Associated Financial Group THREE COMPONENTS OF BENEFITS PLANNING Cost Compliance Culture 1 WELLNESS & STRATEGIC PLANNING Identification What does wellness mean to your organization today? Planning Where do you want to take your organization? Implementation How are you going to get there? Evaluation How effective was your plan? 2 1

2 WHY ARE WE HERE? 3 WHAT ARE WE PAYING FOR? Healthcare Dollars Claims Administration 4 WHO INFLUENCES CLAIMS COSTS? Payors Insurance Company Employer Providers Doctors Hospitals Consumers Employees Dependents 5 2

3 UNCONTROLLED BEHAVIORS = UNCONTROLLED COSTS Unhealthy behaviors Health risks Chronic disease Healthcare costs 6 EVOLUTION OF A WELLNESS PROGRAM 7 EVOLUTION OF WELLNESS Step 1 Education and positive reinforcement Cost awareness (new SBC requirements) Wellness programs encourage health improvement through rewards Smoking cessation programs Health risk questionnaires paper or online Health risk assessment measurement of individual BMI, cholesterol, blood sugar, tobacco usage, etc. 8 3

4 WELLNESS CULTURE PURPOSE: Wellness focuses on changing behavior which Improves the health, productivity, and quality of life of your employees Improves morale and staff retention throughout your organization Decreases direct and indirect healthcare costs THROUGH Measurement (of health) and sharing of data Education Healthy eating environment Promotion of exercise/activity Incentives 9 EVOLUTION OF WELLNESS Step 2 financial accountability Plan design alternatives (e.g. different copays for generic vs. brand name) Pretax plans (flexible spending accounts) Education on where to receive medical care (minute clinic, office visit, urgent care, or ER) Increased deductibles through consumer-driven plans (HRA & HSA plans) 10 EVOLUTION OF WELLNESS Step 3 both wellness and financial accountability Educating employees regarding impact of wellness on healthcare costs Biometric based health plans Providing financial incentives for attaining positive health indicators Radar detectors 11 4

5 DEFINITION OF BIOMETRIC Biometric: The measurement and analysis of unique physical or behavioral characteristics. Merriam-Webster Dictionary In the context of health plans, we are referring to measurements such as: Cholesterol levels Body mass index (BMI) Tobacco use 12 WHAT IS A BIOMETRIC PLAN? Basic theory behind a biometric-results based plan is that healthy participants have fewer claims and therefore lower costs. Biometric Targets Healthier Participants Fewer Claims Lower Costs 13 WHAT IS A BIOMETRIC PLAN? Goal is to reward participants who make healthy lifestyle choices and provide incentive for those who don t to make healthier choices. Makes participants financially accountable for the choices they make. Primary feature of the plan design is financial incentives for participants who meet targets on certain biometric measures. 14 5

6 HOW ARE THEY DIFFERENT FROM TRADITIONAL WELLNESS PLANS? Most traditional wellness plans are participation or activitybased, i.e. rewards provided solely for participation in testing or wellness activities: Health risk assessments Gym membership discounts Walking programs Biometric plans are results based, i.e. rewards are based on actual results of biometric testing 15 WHAT IS A TYPICAL BIOMETRIC PLAN? Typical structure: High deductible health plan Vendor conducted biometric testing Health Risk Assessment (HRA) Financial incentives for each biometric target achieved Typically money applied to deductible or reduction in premium contributions 16 WHAT IS MEASURED? Goal is to select biometrics that are indicators to overall health Common biometrics tested Tobacco use Body Mass Index (BMI) Cholesterol Glucose Blood pressure Pass/fail targets National Institute of Health guidelines are typical starting points May be adjusted based on health of the group or to ease employees into the concept 17 6

7 ALTERNATIVE STANDARDS Participant who fails biometric target may be allowed to earn incentive by satisfying alternative standard that will lead to improved measurement in the future Alternative standards may be legally required in some plan designs (Final Wellness Rules covered in Legal Compliance Section) Even if not required, may be important to create incentive for participant to try to improve Participant who believes target is not achievable or too far out of reach, may have little motivation to try to improve Communication is key! 18 WHO CAN PARTICIPATE? Employees Spouses Makes sense financially Difficult logistically and can be bad for morale Allows you to increase reward based on family premium Dependents Usually does not produce financial savings for the plan Difficult logistically HOW ARE INCENTIVES FUNDED? Major medical plan with high deductible Employees earn rewards to reduce deductible based on satisfying certain biometrics criteria which are designed to promote good health HRA contribution amount linked to biometrics HSA contribution amount linked to biometrics Biometrics and consumer driven healthcare work hand in hand 20 7

8 HOW ARE INCENTIVES FUNDED? Traditional health plan with low deductible Employees can reduce their share of premiums based on satisfying biometrics criteria Employees see impact in their paycheck (rather than in their HRA or HSA accounts) Biometric Plan w/premium Reduction Employer Premium Contribution 80% Tobacco 4% Body Mass Index 4% Cholesterol 4% Blood Pressure 4% Glucose 4% 22 HOW ARE INCENTIVES FUNDED? Rewards unrelated to the health plan Cash (taxable) Points toward gifts (ex: ipad) (taxable) Additional paid time off ( wellness day ) Should make available to all employees 23 8

9 OTHER PLAN DESIGN ISSUES What can be measured? Smoking / tobacco usage Body Mass Index (BMI) Cholesterol Blood pressure Glucose / triglycerides How to measure? Blood Stick Blood Draw Other measurables Complete web based health seminar Exercise x times per week Current on preventive screenings (signed form from doctor) Agree to 100% seat belt use OTHER PLAN DESIGN ISSUES What should be measured? (not pass/fail) Point or grading system, with varying points available for different biometric markers: Full reward for 8-10 points / Grade A Nice try reward for 5-7 points/ Grade B No reward for 0-5 points / Grade C or lower Graduated rewards within individual criteria (e.g. 100% for level one; 80% for level two) Rewards based on improvement Nice try reward if employee improves at least one grade over previous year (regardless of raw score) Tie-in other wellness programs 25 OTHER PLAN DESIGN ISSUES Trust but verify Can verify by requiring affidavits, doctors notes, threat of disciplinary action for dishonesty, etc. Some items will have to be on honor system, e.g. tobacco usage*, seat belt usage * Possible to test, but invasive and costly 26 9

10 LEGAL COMPLIANCE CONSIDERATIONS 27 LAWS IMPACTING WELLNESS HIPAA Final Wellness Rules ADA GINA Tax Issues Wage & Hour Laws State Laws Health Care Reform 28 HIPAA rules will not apply if reward is unrelated to health plan and participation in wellness program is open to all employees. (ADA and other laws may apply) On June 3, 2013, agencies issued final revised HIPAA Wellness Plan rules. While overall structure remains the same, final rules make significant revisions with respect to Reasonable Alternative Standards (RAS)

11 (1) Participatory Wellness Program Reward not based on satisfying standard related to health factor EX: Completing a Health Risk Assessment Health-contingent Wellness Program Must satisfy standard related to health factor; or Undertake more than a similarly situation individual based on a health factor TWO TYPES: (2) Activity-only (3) Outcome-based 30 Activity-Only Wellness Program Program requires an individual to perform or complete an activity related to a health factor in order to receive a reward but does not require a specific health outcome. Examples Walking program Diet program (w/o weight loss requirement) Exercise program 31 Outcome-Based Wellness Program Program requires an individual to attain or maintain a specific health outcome in order to receive a reward. Examples Premium differentials for smoking / tobacco use Biometrics! Rewards tied to Body Mass Index (BMI), cholesterol, blood pressure and other biomarkers measured during health risk assessment being within normal/healthy limits 32 11

12 Outcome-Based Program Requirements 1. Opportunity to qualify at least once a year. 2. Size of all health-contingent rewards does not exceed applicable percentage. 3. Reasonably designed to promote health or prevent disease. 4. Provide RAS to any individual who fails to meet initial standard. 5. Provide notice of availability of RAS 33 Size of reward Applicable percentage = 30% Increased to 50% to the extent that the additional percentage is in connection with a program designed to prevent or reduce tobacco use Final rules continue to assume tobacco and nontobacco rewards are separate and give no guidance how to separate an integrated scoring system. 34 Reasonable Alternative Standards Outcome-Based Programs Must provide RAS to any individual who fails to meet initial standard on measurement, test or screening Medical need for RAS is irrelevant. Can not require physician s verification of medical need for RAS

13 Reasonable Alternative Standards Outcome- Based Programs (cont.) Participant who completes RAS must receive full reward for the entire plan year. This may require providing reward retroactively once RAS is completed. Reward must be available whether or not RAS is successful in achieving the desired outcome. E.g. Smoker who completes smoking cessation program, whether or not they quit smoking E.g. Overweight participant who completes exercise, program, whether or not they succeed in losing weight. 36 HEALTH CARE REFORM & AFFORDABILITY $3,000* penalty for every employee who was offered coverage that isn t affordable, and who goes into the Exchange and receives a subsidy Coverage is not affordable if employee s share of premium for employee only coverage on lowest cost plan is greater than 9.5% of household income *Beginning in 2015; indexed for inflation 37 WELLNESS INCENTIVES & AFFORDABILITY Tobacco-related wellness incentives are counted in determining whether coverage is affordable All other wellness incentives are not counted in determining whether coverage is affordable 38 13

14 ADA VOLUNTARY VS. INVOLUNTARY ADA requires a wellness plan to be voluntary Informal ADA guidance suggests that severe penalties may render something involuntary Levels of risk: High participation is mandatory condition of eligibility in the health plan Medium entire employer contribution to health plan linked to participation Low a small percentage of employer contribution to health plan linked to participation 39 GINA Genetic Information Nondiscrimination Act of 2008 Cannot ask questions about participant s family health history during biometric testing process Can ask family health history questions as part of separate, voluntary health risk assessment with no rewards or penalties, conducted after enrollment. 40 CASE STUDY: SHEBOYGAN AREA SCHOOL DISTRICT Prior to Offered Health Risk Assessments (HRA) No Incentive Marginal Participation ~ 30% Wellness Coordinator Hired September 2008 Wellness Program Development Biggest Loser, Commit to Be Fit, Stress to Strength, etc. Continued to Offer HRAs 2011 Implemented Incentive for Employee to Participate in the HRA 3% Premium Differential 2012 Strategic Planning with Leadership Team Placing a Priority on Wellness Joined Near-Site Clinic Started by Sheboygan County Health Plan Design Changes to Incent Employees and Their Families to Use the Clinic Services HRAs Conducted by Interra Health (Clinic Manager) 3% Premium Differential 72% Employee Participation 41 14

15 CASE STUDY: SHEBOYGAN AREA SCHOOL DISTRICT 2013 Development of a Committee to Design SASD s Wellness Program Employee & Spouse Required to Participate in HRA to Receive Premium Differential 3% Premium Differential 71% Employee & Spouse Participation 2% Improvement in Overall HRA Score 2014 January & February -Wellness Program Rollout with Reasonable Alternative Standards Informational Meetings at Each School Recorded Presentation and Program Brochure 2015 New Premium Differentials/Incentives Effective January 1 st 30% Cost Share for Non Participation 18% Cost Share for Completing the HRA and Obtaining 0-1,250 Points 12% Cost Share for Completing the HRA and Obtaining 1,250+ Points 42 CASE STUDY: SHEBOYGAN AREA SCHOOL DISTRICT MEASUREABLE OUTCOMES Mid to low single digit increases in medical claims cost since For every point of improvement in the HRA, there is an estimated 1.8% in claims savings. Evidence of improved chronic condition compliance while reducing barriers to obtain quality healthcare. Employee savings = 29% Clinic savings: Office visits and office procedures 28% savings Immunizations 34% savings Chiropractic 15% savings 43 THANK YOU! Al Jaeger, CEBS Senior Benefits Consultant, SVP al.jaeger@associatedfinancialgroup.com Mardi Burns, CHC Senior Benefits Consultant, SVP Mardi.Burns@AssociatedFinancialGroup.com Bret McKitrick, JD HR Consultant, VP Bret.McKitrick@AssociatedFinancialGroup.com