CMS Allows States To Offer Individual Market Wellness Programs

By Consumers For Quality Care, on November 19, 2019

Photo by Heidi de Marco/KNH

On September 30^th, HHS announced an opportunity for 10 states to participate in wellness demonstration programs. These programs have been a source of controversy in the past, as advocates say they could allow insurers to vary the cost of coverage based on measurable health outcomes of the person on the plan, such as blood pressure or cholesterol. As Health Affairs reports:

To date, wellness programs have been limited to employers, but the Affordable Care Act (ACA) included a demonstration project to allow HHS and states to experiment with extending wellness programs to the individual market. States that are approved for a demonstration project could allow issuers in their individual market to vary the cost of coverage by as much as 30 percent because of, say, high blood pressure or high cholesterol. This could allow backdoor health status underwriting, which the ACA set out to prohibit.

Wellness programs have proven to be very popular with employers. In 2019, 84 percent of large firms who offered health benefits offered a wellness program. But despite their popularity with employers, critics have pointed out that there is little evidence to suggest the programs work to achieve better health outcomes.

Despite employer enthusiasm (and an $8 billion workplace wellness industry), there is little evidence that wellness programs provide results. A meta-analysis of the research on wellness programs in 2010 suggested that wellness programs could be an effective investment for employers. However, in a recent peer-reviewed, large-scale multi-site randomized controlled trial of a workplace wellness program, some of the same researchers (from the 2010 study) found that the wellness program had no impact on employee health outcomes such as BMI, blood pressure, or cholesterol. Although employees with the wellness program engaged in higher rates of some healthy behaviors, this also did not translate into better health or employment outcomes. 

In addition to efficacy questions, there are also potential legal problems with wellness programs. In 2014, for example, a lawsuit by the Equal Employment Opportunity Commission asserted that wellness programs violated the ACA.

In 2014, the Equal Employment Opportunity Commission (EEOC) filed a number of lawsuits against employers asserting that their wellness programs violated the ACA and GINA by requiring employees to submit to biometric testing and health risk screening. Following outcry from employers, federal regulators released additional guidance in 2015. This included new guidance on HIPAA privacy rules and wellness programs, a report on workplace wellness programs, and additional frequently asked questions.

Due to these concerns it is still not clear how many states will decide to take advantage of these newly allowed programs.