By Evie Zois Sweeney
Muchmore Harrington Smalley & Associates
November 2012 - The Affordable Care Act (ACA) is a massive, complicated and what feels like all-encompassing piece of legislation that continues to confound most Americans. Academics, bureaucrats and small business owners all continue to analyze the implications of the bill while determining how best to adapt to the changes. One central theme of the ACA that many small business owners are reviewing is the various provisions that encourage employers to develop preventive care and wellness programs for their employees.
Wellness programs may include gym memberships, smoking cessation programs, nutrition and diet counseling, diabetes prevention strategies and more. The initiatives are intended to encourage employees to adopt healthier lifestyle choices. Employers have a lot at stake; the Centers for Disease Control and Prevention have estimated that productivity losses related to personal and family health problems cost U.S. employers an estimated $1,685 per employee per year. It’s a staggering figure if considered cumulatively -- $225.8 billion annually.
So, how does the ACA propose to help the plight of the small business owner -- $200 million over the course of five years to start. The ACA includes a section that provides grants for small businesses that, as of enactment of the act, were not offering comprehensive workplace wellness programs. The ACA defines “eligible employer” as an employer with less than 100 employees who work 25 hours or more per week. The act also specifies that wellness programs should be grounded in evidence-based research and best practices and should include the following components:
A) Health awareness initiatives, including health education, preventive screenings, and health risk assessments;
B) Efforts to maximize employee engagement including mechanisms to encourage employee participation;
C) Initiatives to change unhealthy behaviors and lifestyle choices; efforts could include counseling, online programs and self-help materials;
D) Supportive environment efforts including workplace policies to encourage healthy lifestyles, healthy eating, increased physical activity and improved mental health.
The ACA also increases the incentives that may be made available to wellness program participants. Currently, employers are allowed to provide a financial reward of up to 20 percent of the costs of coverage for employees who participate in wellness programs and satisfy a standard related to health status. After January 1, 2014, employers will be allowed to discount 30 percent of the cost of individual or family health care premiums. That amount could rise to as high as 50 percent if the Secretaries of Health and Human Services, Labor and Treasury approve of the change.
As with all things surrounding the ACA, remaining apprised of changes or the issuance of new policy guidelines is important. The scope of the act and the potential implications on your business warrants close monitoring.