Thursday, October 15, 2009

Wellness Incentives or Discrimination Loophole?

The Washington Post's David Hilzenrath warns that expanded wellness incentives being considered by Congress could give employers and insurers a way to establish health plans that discriminate on the basis of pre-existing conditions.

"President Obama and members of Congress have said they are trying to create a system in which no one can be denied coverage or charged higher premiums based on their health status," Hilzenrath writes. "The insurance lobby has said it shares that goal. However, so-called wellness incentives could introduce a colossal loophole. In effect, they would permit insurers and employers to make coverage less affordable for people exhibiting risk factors for problems such as diabetes, heart disease and stroke."

Currently, incentives based on health factors are capped at 20 percent of the premium paid by employer and employee combined. Legislation passed by Senate health and finance committees would increase the limit to 30 percent, and it would give government officials the power to raise it to 50 percent.

"A single employee whose annual premiums cost him and his employer the national average of $4,824 could have as much as $2,412 on the line," Hilzenrath writes. "At least under the health panel's bill, the stakes could be higher for people with family coverage. Families with premiums of $13,375 -- the combined average for employer-sponsored coverage, according to a recent survey -- could have $6,688 at risk."

Such concerns led Paychex, a payroll management company, to structure a program that provide incentives for employee participation in wellness programs without pegging them to biometric targets.

"Employees could be doing everything right and still not achieve the desired outcome. And so then you're holding them accountable for something that may not be achievable," said Jake Flaitz, the company's director of benefits.


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