Listening to Consumers: Values-Focused Health Benefits and Education

Listening to Consumers: Values-Focused Health Benefits and Education
By Lois A. Vitt, Institute for Socio-Financial Studies (ISFS), and Ray Werntz, EBRI Fellow
EBRI Issue Brief No. 313. January 2008.

This report on how employers can provide useful information to employees in conjunction with
consumer-directed health plans concludes: “Consumer values can provide essential insights into consumer thinking about health-related behaviors
and financial decision-making. They also can provide a blueprint for health care businesses and policymakers
working to make the U.S. health care system more responsive to consumers. Should health education
initiatives prove ineffective, the “consumer-driven health movement” could well be doomed, especially if it
relies upon fully educated health consumers taking self-initiated actions. The perceived ineffectiveness of
education in 401(k) plans resulted in legislation to add “defaults” to these plans so that they no longer relied
upon positive employee action. In the health arena, the default approach is exactly what the consumer-driven
health model seeks to move away from.”  Full report (pdf)

DOL Plugs HIPAAf Loophole Regarding Wellness Incentives

Last month, the Department of Labor’s Employee Benefits Security Administration issued a letter outlining regulatory guidelines for wellness programs.  See DOL News Release (html) Field Assistance Bulletin (html)  The impact of these changes is summarized by Human Resource Executive as follows:  “The loophole comes into play because while the Health Insurance Portability and Accountability Act does not allow employers to charge different premiums for different employees (thin vs. overweight, for example) in employer-paid health plans, supplemental coverages could circumvent HIPAA.  Some employers have used supplemental coverages to offer “discounts” or “credits” to employees following specific “healthier” paths — for example quitting smoking or losing weight.Currently, there are exceptions from strict HIPAA regulations for wellness programs — permitting financial incentives of up to 20 percent of the cost of coverage per employee. But the supplemental coverages, which are not part of HIPAA restrictions, could be used to as a way around that number while, at the same time, penalizing those who can’t meet certain criteria.”  The new rules effectively plug that loophole.