Location:
HEALTH; INSURANCE - HEALTH - REFORM; SMALL BUSINESS;
Scope:
Federal laws/regulations;

OLR Research Report


September 14, 2010 2010-R-0380

OLR BACKGROUNDER: FEDERAL HEALTH CARE REFORM-GRANTS FOR WORKPLACE WELLNESS PROGRAMS

By: John Kasprak, Senior Attorney

INTRODUCTION

High health care costs are an increasingly heavy burden for U.S. employers. Some businesses have implemented “workplace wellness” programs which provide incentives to employees who practice healthy and health care-cost cutting behaviors like smoking cessation and regular exercise. Current economic conditions have affected both the creation and continuation of such programs. The federal health care reform act includes grant funding to help small businesses develop comprehensive wellness programs.

FEDERAL HEALTH CARE REFORM AND WORKPLACE WELLNESS PROGRAMS

Grant Program

The federal Patient Protection and Affordable Care Act (PPACA; P.L. 111-148, Sec. 10408) establishes a grant program to help small businesses provide comprehensive workplace wellness programs. Starting next year, the law authorizes an appropriation of $200 million over five years (FYs 2011-2015) for certain small businesses that start wellness programs.

Employers are eligible for grants if they (1) have no more than 100 employees who work at least 25 hours per week and (2) did not have a program in place on March 23, 2010 (the date the health reform law was enacted (PPACA, Sec. 10408 (b)).

Grant Program Criteria and Requirements

The PPACA requires the secretary of Health and Human Services (HHS) to develop program criteria for comprehensive workplace wellness programs that are based on and consistent with evidence-based research and best practices. This includes the Guide to Community Preventive Services, the Guide to Clinical Preventive Services, and the National Registry for Effective Programs.

An employer must offer a comprehensive workplace wellness program to all employees to be eligible for a grant. The program must include:

1. health awareness initiatives, including health education, preventive screenings, and health risk assessments;

2. efforts to maximize employee engagement, including mechanisms to encourage employee participation;

3. initiatives to change unhealthy behaviors and lifestyle choices, including counseling, seminars, online programs, and self-help materials; and

4. supportive environments efforts, including workplace policies to encourage healthy lifestyles, healthy eating, increased physical activity, and improved mental health (Sec. 10408 (c)).

Grant Application

Eligible employers seeking to participate in the grant program must submit an application to the HHS secretary that contains a proposal for a comprehensive workplace wellness program meeting the criteria and requirements listed above. The health reform legislation does not specify the per employer or employee grant amount, or any requirements for employers to provide matching funds (Sec. 10408 (d)).

Related Provision-Employee Wellness Incentives

For health plans beginning on or after January 1, 2014, the PPACA increases the incentives that can be made available to wellness program participants. Currently, under the federal Health Insurance Portability and Accountability act (HIPAA) nondiscrimination rules, employers are allowed to give a premium discount, rebate, or other reward of up to 20% of the costs of coverage for employees who participate in wellness programs and satisfy a standard related to health status. Under the PPACA, employers will be able to allow discounts of up to 30% of the cost of individual or family health care premiums. That amount could increase to 50% if the secretaries of HHS, Labor, and Treasury deem it appropriate (PPACA, Sec. 1201).

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