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Building wellness program incentives within a health plan

Posted on Jan 2, 2013 | Written by Glenn Leary | Comments (0)

It’s a question in population health management that never fails to attract attention: what is the right incentive to engage members in programs for the long term?

In recent months, HealthFitness’ Edward Framer, Ph.D., director of health and behavioral sciences, has culled the research and published a series of posts on precisely this subject. Within these posts, Ed explores national employer trends, employer vs. employee perceptions, and analysis on expert guidance for incentive programs. If you have not had a chance to view them, I would highly encourage paying them a visit, particularly the ones from September and November.

As health plans progress their Patient Protection and Affordable Care Act (PPACA) strategies for 2014, the incentive question takes on great importance, having influence over more than just participation in wellness activities. As individuals gain autonomy in their coverage choices, the right wellness incentive can be a powerful tool for reaching and connecting with the membership that your plan can best serve.

So then, particularly in the exchange market, what will the right incentive look like? Is it outcomes- or activity-based? Carrot or stick? Cash or credit? We often say in our large employer business that there is no one-size-fits-all approach. Interestingly enough, I believe our philosophy for that market still applies for health plans. If incentives can be seen as a tool to guide the right members to programs, all the more reason rewards programs should be targeted for the values and culture of the target market you’ve defined.

Of course, the PPACA is not silent on the issue of what wellness incentives should look like in 2014. As you consider what may work best for your membership, I’ll leave you with the following PPACA guidelines to keep in mind:

1. The incentive awarded cannot be more than 30% of the cost of coverage. This represents an increase from 20% prior to the PPACA.
2. The program incentivized must be “reasonably designed to promote health or prevent disease.”
3. Employees must have an annual opportunity to qualify.
4. All employees must be able to earn the reward, and for individuals who cannot or should not meet a certain standard (e.g., due to a medical condition), a “reasonable alternative standard” must be available.
5. This “reasonable alternative standard” needs to be included in written materials.

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