Wellness Grants for Small Business
Funding on Hold
Originally, the Affordable Care Act established that grants would be available to eligible small businesses, which implemented a comprehensive wellness program, beginning in 2011. Under this grant program, $200 million was supposed to be appropriated to be spent between 2011 and 2015. Currently, the grant money and program have been directed to the Congressional Appropriating Committees for review. The grant money will not be available to until further notice is given.
Aims to Lower Long Term Health Costs
This grant money would be used to encourage small businesses to provide wellness programs and employee assistance programs to their employees. Wellness programs have been noted to improve employee healthcare habits, which in the long-run is statistically linked to lower employer and long-term healthcare costs.
Who is Eligible?
An eligible small businesses for purposes of the grant is an employer:
- • that employs less than 100 employees,
- • whose employees work 25 hours or more per week
- • that did not provide a workplace wellness program as of March 23, 2010
Eligible small businesses will be required to submit an application to the Department of Health and Human Services that includes a proposal for a comprehensive wellness program. For purposes of this grant, a comprehensive wellness program will include the following components:
- • health awareness initiatives,
- • efforts to maximize employee engagement,
- • initiatives to change unhealthy behaviors and lifestyle choices, and
- • supportive environment efforts
Wellness Plans Not Subject to Nondiscrimination Rules in 2014
Beginning in 2014, there will be no more medical underwriting. Plans and insurers will still be allowed to underwrite based on age, gender, smoking status, and geographic location, but not on any of the health status-related factors. This will create a dramatic change in the healthcare industry. The law has built into it two wellness programs that would not be subject to these new nondiscrimination regulations. These wellness programs are referred to as:
- participation-only wellness programs, and
- standard-based wellness programs
Both of these new types of wellness programs will not be subject to the nondiscrimination rules, which mean that insurers can charge different premiums and impose different cost-sharing requirements based on participation in one of these two new wellness programs.
Participation-only wellness programs are programs that do not condition eligibility for a reward upon a participant’s ability to meet a health standard. They will be allowed under the law as long as the program is available to all similarly situated individuals. An example of this type of program is one that reimburses the costs of smoking-cessation classes, regardless of whether the individual successfully quits smoking. Under this program, you may charge the person a lower health insurance premium simply because they participate.
Standard-based wellness programs are programs that do condition eligibility for a reward upon a participant’s ability to meet a standard related to a health factor. These types of wellness programs will be permissible if they meet the following five requirements:
- The reward must be no more than 20% of the cost of coverage (this limit is increased to 30% for plan years beginning on or after January 1, 2014)
- The program must be designed to promote health or prevent disease;
- The program must give individuals an opportunity to qualify for the reward at least once a year;
- The reward must be available to all similarly situated individuals;
- The program must disclose that alternative standards (or waivers) are available.
These wellness programs would allow a plan or insurer to charge different premiums and impose different cost-sharing requirements to those who participate in the wellness program. Between the grant money and the exemption from very strict rules in 2014, wellness programs are going to play a very big role in healthcare reform.