The Quick and Easy Guide to Health-Contingent Programs

If you could get paid to exercise, would you? How about getting paid to eat a healthy meal? A lot of people would be on the treadmill or chomping down on kale salad if they knew that each step and each bite was another dollar in their pocket.

In many ways, health-contingent wellness programs are set up to do just that! They reward employees for making those healthy choices. But instead of cold, hard cash, employees receive employer rewards or adjustments in health care premiums for meeting specific health benchmarks.

This simple guide will provide an overview of health-contingent programs: what they are, how they work, and the benefits of participation. With this information at hand, you can decide if a health-contingent program is right for your company.

What is a Health-Contingent Program?

A health-contingent program is a type of health and wellness initiative that uses medical information and health outcomes, such as blood pressure or cholesterol, to determine whether employees have met the initial health standards set by the program.

To achieve these standards, employers work with employees to set goals based on individual objectives related to physical activity, nutrition, and other health factors. The most common health-contingent wellness programs include challenges and incentives that reward employees for getting regular checkups, quitting smoking, developing an exercise regimen, or improving their overall lifestyle.

Employers can offer incentives for employees to meet their health goals, such as cost-sharing health insurance plans and other financial incentives or rewards. Through this program, you can set goals for your employees and determine rewards such as gift cards, vacation days, or discounts on health insurance premiums.

Employers can also use a points system to reward employees who meet certain benchmarks with points that can be exchanged for time off, discounts on gym memberships, or other health perks.

Why are Health-Contingent Programs Beneficial?

Health-contingent programs provide motivation and accountability for those who may benefit from additional support to track their health and wellness. It creates a practical incentive for individuals to change their lifestyles to improve their overall wellbeing. Additionally, by linking rewards to healthy behavior, these programs provide an engaging way for people to learn about nutrition and physical activity in a fun, positive environment.

Health-contingent programs also aid in reducing overall staff healthcare expenses. Amulti-year case study from WellStepsof thousands of public school employees in the Rocky Mountains, for example, found a comprehensive wellness program helped employees develop and sustain healthful habits, reducing their elevated health risks. Furthermore, the initiative reversed the district’s rising medical costs.

Health-Contingent Vs. Participatory Wellness Programs

Health-contingent and participatory wellness programs promote healthy behaviors among employees. The main distinction between the two is that health-contingent programs require employees to meet specific health standards, such as reaching specific BMI, to receive rewards. 

Participatory wellness programs, on the other hand, do not require employees to meet any particular health standards. These programs focus more on providing educational resources and activities that promote healthful behaviors.

Examples of Health-Contingent Wellness Programs

One example of a health-contingent wellness program is a premium discount wellness program. Per the Affordable Care Act (ACA), employers or insurers can offer discounts or incentivesfor employees or members to participate in certain healthy lifestyle activities. By participating in these activities, members can receive discounts on their premiums, essentially rewarding them for taking care of their health.

These activities can include:

• Regular physical activity, such as going to the gym or running. 
• Attending classes on nutrition.
• Participating in weight-management programs. 
• Quitting smoking. 
• Taking part in preventative screenings, such as mammograms and colon cancer screenings.

Another type of health-contingent wellness program is an outcomes-based wellness program. This type of program rewards participants if they reach specific health goals. The goals can range from reducing cholesterol to achieving a particular BMI. Participants who demonstrate that they have completed their goals will receive rewards like cash prizes or lower insurance premiums. This style of wellness program encourages people to take ownership of their health by setting achievable benchmarks and providing motivation for reaching them. 

A third common type of health-contingent wellness program is a health risk assessment (HRA). An HRA is often used by employers or insurers to identify any risk factors that an employee or member may have by collecting information about their medical history, lifestyle, and family history. After assessing the individual’s risks, the employer or insurer will provide recommendations on how the person can reduce their risks through specific treatments, lifestyle changes, or disease management plans. Participants who complete these programs are typically rewarded with lower insurance premiums. 

Steps to Set up a Health-Contingent Wellness Program

One mistake to avoid when building your program is focusing onlyon the employees with the highest health risks. Doing that might mean you will miss employees with unhealthy behaviors that could lead to future high-risk health issues. Successful health-contingent wellness programs keep everyone in mind.

The program first aims to improve employee wellbeing across the board. It then strives to maintain healthy employees in their optimal condition. When both these objectives are met, employers are more likely to see a decrease in the cost of employee health care, plus increased productivity and morale.

Here are five steps you can take to start progressing toward these wellness returns.

1. Establish Goals and Plan Materials

The first step in setting up a health-contingent wellness program is determining the goals of the program and how it will be structured to achieve them. Then you can gather all the resources you need to make informed decisions and prepare program materials. This includes researching group health plan costs and how to comply with HIPAA; what waivers to use for health screenings or exercise programs; and how to set nondiscrimination rules in line with federal laws like the Americans with Disabilities Act (ADA) or the Genetic Information Nondiscrimination Act.

2. Create Guidelines

It’s essential to set clear guidelines for the program to ensure that it is fair and equitable to all participants. Effective wellness program rules and regulations outline what is expected of program participation. Whether you offer a smoking cessation program or a personal health coach to train employees, consider what metrics you will use to measure health outcomes. What rewards or wellness incentives will be offered? What penalties, if any, will be imposed for failing to reach benchmarks?

3. Choose a Program Provider

In this step, you’ll select an issuer who can help design and implement the program. A good provider should have experience creating and administering successful health-contingent wellness programs. To be sure they are a good fit, consider asking questions about which health conditions they do diagnostic testing for, the cost of coverage for specific health outcomes, and what workplace wellness programs they support.

4. Promote the Program

Once your program is up and running, it’s crucial that your employees understand how their health status affects program perks like their health insurance coverage. This can be done through email campaigns, posters in the workplace, or educational seminars. Inadequate communication with employees regarding the program can result in low participation

5. Monitor the Program

Periodically monitoring the program can help ensure it meets its goals and objectives. This means keeping track of participant enrollment, satisfaction, engagement levels, and other measurable health outcomes. Consider checking in with your participants to find out how it’s going for them and if they are taking advantage of the rewards and incentives offered by the program.

Making Your Health Benefits Stand Out

Reduced healthcare costs are just one of the many benefits of a health-contingent wellness program. It also helps attract and retain top talent, since unique health benefits can help you stand out from your competition.

By offering comprehensive wellness programs, employers can demonstrate that they take employee health seriously and are committed to providing a safe and healthy work environment. As you build out your employee benefits package, reach out to a Wellbeing Specialistto talk about how we can help set you up for success!

References 

• ACA health plans increasingly offer wellness incentives. (February 10, 2022). Healthinsurance.org. Retrieved on February 16, 2023 from https://www.healthinsurance.org/obamacare/aca-health-plans-increasingly-offer-wellness-incentives/. 
• Affordable Care Act (ACA). (2023). Healthcare.gov. Retrieved on February 16, 2023 from https://www.healthcare.gov/glossary/affordable-care-act/#:~:text=Affordable%20Care%20Act%20(ACA)%20%2D,HealthCare.gov. 
• Key Use Cases for Health Risk Assessments. (September 3, 2021). Tech Target. Retrieved on February 16, 2023 from https://healthitanalytics.com/news/key-use-cases-for-health-risk-assessments. 
• Local Government Wellness Programs: A Viable Option to Decrease Healthcare Costs and Improve Productivity. (December 2010). Semantic Scholar. Retrieved on February 16, 2023 from https://www.semanticscholar.org/paper/Local-Government-Wellness-Programs%3A-A-Viable-Option-Benavides-David/766dd256657f7f584d2775e49a48b56da94bc0bc. 
• Three Years of Worksite Wellness. (2014) WellSteps. Retrieved on February 16, 2023 from https://www.wellsteps.com/files/three_years_of_wellness.pdf.