From Issue 5 of Ceridian Health Care Compass May 19, 2010

For small employers, less than 100 employees

Under the health care reform law, small employers will now have a financial incentive to create wellness programs.

About $200 million in grants will be made available from 2011 to 2015 to fund comprehensive health promotion programs for employers with 100 employees or less who work 25 or more hours a week.

The grant program is only for companies who do not have an existing program in place.
Eligible wellness programs must include health awareness initiatives, efforts to engage employees, initiatives to change unhealthy behaviors and lifestyle choices, and supportive environment efforts.

An application process or specific rules on how employers can apply for these grants has yet to be determined. The federal government is expected to begin awarding grants in 2011.

For larger employers, 100 employees and up

Current HIPAA regulations allow employers to offer premium differentials of up to 20 percent for employees who meet specific health goals. These goals might include smoking cessation, achieving a recommended weight or fitness level, or having normal biometric levels.

The new law:

• Codifies in statute the ability to offer these premium differentials.
• Increases the amount of the premium differential from 20 to 30 percent.
• Provides Health and Human Services with the authority to increase this amount to 50 percent.

Health and Human Services will evaluate the impact of these incentives on improving health and reducing medical costs. These wellness provisions are expected to increase the number of businesses that offer wellness programs, increase the number of employees who participate, improve overall program effectiveness and allow for better tracking of a wellness program's results.