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Wellness Programs Could Factor into Employer Future Insurance Decisions, Expert Says

By Melissa Attias, CQ Roll Call

May 31, 2013 -- The success of workplace wellness programs could have an impact on whether employers decide to move their workers into the new health insurance exchanges, or marketplaces, an official from CVS Caremark suggested at an event last week. 

Troy Brennan, executive vice president and chief medical officer of CVS Caremark, said he thinks there is a big chance that many employers will be considering how they can use the exchanges in 2017 or 2018. Workplace wellness programs factor into that picture, Brennan argued, "so it's a really critical time" to examine them. "The reason why you offer workplace-based health insurance is because you think you're going to be able to promote better health in your workforce, and as a result of that, have a better operating company," he said. "If these wellness programs don't work or if they turn out to be sort of bankrupt or maybe they're just targeting the wrong people, then I think there's less and less of an argument to maintain employer-based insurance and a lot of employers are going to be looking at sort of, 'what should we be doing with the exchanges?'"

Brennan spoke at an event focused on the effectiveness of wellness workplace programs. It was sponsored by the Alliance for Health Reform and The Robert Wood Johnson Foundation. Earlier this week, the Obama administration released a final rule to implement a part of the health care overhaul that addresses these initiatives.

But while the programs have been increasing in popularity, several panelists spoke about the need for additional research on what they are accomplishing.

Mary Grealy, president of the Healthcare Leadership Council, an industry group, said she thinks "it's very fair to say that we are still very much in the learning stages." She noted that the RAND Corporation reported a scarcity of peer-reviewed studies on the efficacy of these programs and said that some employers are funding them without collecting metrics on the return on their investment.

At the same time, she said a survey of her group's members found that a key factor in the success of wellness programs is the engagement and support of senior leadership. Approaches that factor in the unique characteristics of a particular workforce also bring greater success, she said. And she named access to healthier foods, opportunities and incentives for physical activity, and information on how to lead a healthier lifestyle as unifying elements of programs that appear to be effective.

"I think there is much more that we need to learn about these programs and it's hoped that more employers will begin tracking their specific health and economic gains so we can really have that peer review proof that I think we're all looking for," she said.

Jill Horwitz, a law professor at the University of California, Los Angeles, also discussed an article she coauthored in Health Affairs on how wellness programs that are based on meeting a health standard save money. Under the health care law (PL 111-148, PL 111-152), the amount of rewards and penalties that can be tied to those programs can be up to 30 percent of the total cost of coverage starting in 2014 compared to 20 percent now. And under the final rule, the percentage jumps to 50 percent for programs that address tobacco use.

While there are piles of studies that show correlations and associations with incentives and health behaviors and spending, there is very scant evidence that incentives actually cause behavioral changes and reduce spending," Horwitz said.

Meanwhile, Karin Feldman of the AFL-CIO said she was concerned that those health-contingent programs risk introducing underwriting into the workplace. Under the health care law, she noted, insurers in the individual and small group market are limited on what factors they can use to vary premiums next year.

She also emphasized that under the new health law percentages, the amount of money involved can be large since the base is the total cost of coverage, not just the worker's contribution.

"The financial exposure is pretty tremendous," she said.

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