Wellness Incentives: What Your (Potential) Clients Need To Know
Passage of the Affordable Care Act (ACA aka Obamacare) has opened up a number of interesting points for discussion among the right that an employer has to reward or punish poor wellness behaviors. In a recent example reported by Insurance Journal, Honeywell, Inc., was told that they did NOT have to remove wellness penalties to employees who failed to meet certain standards.
“In Honeywell’s program workers and their spouses are asked to undergo a biometric screening that includes drawing blood to test cholesterol levels and a determination of body mass index by measurement of height, weight and circumference,” writes Beth Hawkins and Andrew Harris for IJ, adding that “Holdouts are assessed a $500 surcharge on their 2015 medical plan costs, can lose as much as $1,500 in company contributions to health savings accounts and be docked as much as $2,000 more in tobacco-related surcharges, according to the EEOC’s complaint.”
“Honeywell’s medical examinations are unlawful,” the EEOC said in court papers, claiming the exams “violate the federal Americans With Disabilities Act, which bars employers from compelling medical examinations that aren’t job related” and adding that the biometric screening “may also breach a federal law prohibiting discrimination based on genetic information.”
Ultimately, the court ruled that Honeywell may continue its program. The prevailing school of thought: if an employer is mandated to provide insurance subsidies to employees, then it is also within its rights to ensure that the risk pool is affordable for all employees. By issuing penalties, Honeywell is essentially creating incentive to meet wellness criteria that will control costs.
While the issue is far from over, it does seem to equivocate what insurance-providing employers are doing with insurance companies that set rates based on an applicant’s risk factors. It may not be an easy pill for some to swallow, but at least for now, it’s the way things are.
In order to ensure that your clients are navigating this new system well, take advantage of the opportunity to remind them of the following truths.
One: They Have SOME Control Over What They’re Paying.
It may be aggravating to be assessed a penalty or to pay more for insurance based on specific life choices or changes, but it does mean that your clients have a measure of control over what they’re paying. Also, as one commenter points out, “At my sister’s place of employment, the penalty was going to apply to her because her husband is a smoker (she never has been) and is on her group medical coverage – so now the control is not over just the employee but also family members.”
By exercising, eating right, maintaining good credit, keeping a clean driving record, and encouraging others on their policies to do the same, your customers can reap benefits across multiple insurance products.
Two: They Do Have Options.
The ACA has placed applicants in a system where they have more options. While it may be too early to determine if those options are good or bad, it has created a world where insurers have to provide coverage for all areas of health and wellness. Obviously, poor health will ultimately result in higher costs, but applicants have the chance to compare and contrast prices just as they would with life insurance, auto insurance, etc.
The November 4 Honeywell decision is the first in what is likely to be a long process of determining an employer’s rights under the ACA. While courts continue to decide based on merit, it’s never too early to acclimate your clients (or insurance leads) to their roles in the insurance process.