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Topics of interest to both consumers and agents related to Covered California and the ACA biased in favor of the successful implementation of the Exchange and deliberately apolitical.


Effective Wellness Programs are Tough to Get Right

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The ACA has established criteria for wellness programs that that are non-discriminatory and open to all employees. There are types of wellness programs:

  1. participatory wellness programs, which are non-conditional (e.g., discounts for gym memberships), and
  2. health-contingent programs that require participants to achieve a specific health goal before being eligible for an award or incentive (e.g., achievement of weight loss goals). Rewards may be in the form of discounts, premium rebates, or waiver of cost-sharing such as deductibles and copayments. Negative incentives in the form of penalties may also be used. The maximum reward can be up to 30% of the total cost of coverage and to 50% for smoking-cessation initiatives.

While the ACA provides a framework for constructing a wellness program and a modest financial incentive, it leaves employers in the driver’s seat to creatively define and implement programs that impact health and costs.

In my opinion, the major obstacles to improving overall company health or providing cost savings to employers are difficult to overcome.

  • It’s usually the healthiest employees who take advantage of these programs.
  • The program’s impact on health or costs is realized several years later.

Employers want to find targeted programs that impact changes in health status and cost reductions that can be realized sooner and apply to those less inclined to participate. And employers are grappling to find the right combination of sticks and carrots to encourage the behavior changes desirable for employees and beneficial to the company’s bottom line.

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