Affordable Care Act Plans Will Be Able To Offer Wellness Incentives Under CMS Pilot

Affordable Care ActInsurers can offer premium discounts or other incentives to engage in healthy activities, but questions remain as to whether wellness programs work.

Affordable Care Act plans in 10 states will be able to offer wellness programs, as employer-sponsored plans have been doing for years.

The Centers for Medicare and Medicaid Services on Monday announced the opportunity for 10 states to apply to participate in the wellness program demonstration project. This will allow members in the individual market to have broader access to a range of wellness programs than is currently available under the Affordable Care Act law.

States would be able to permit insurers to offer premium cost savings or other incentives, if members choose to engage in healthy activities and improve their health outcomes, CMS said.


Most organizations offer their employees at least one kind of wellness benefit, and many have dedicated wellness budgets.

The incentives are improved health, lower healthcare costs and greater productivity. But recent studies have shown that offering a wellness program may not produce all of the desired results.

A recent JAMA study of over 30,000 employees at a U.S. warehouse found that workplace wellness programs had no significant impact on absenteeism, healthcare spending or job performance, but did show greater rates of some positive health behaviors, such as engaging in regular exercise.

There was an 8.3% higher rate of employees who reported engaging in regular exercise and a 13.6% increase in employees who reported actively managing their weight. But after 18 months, there were no significant differences in other self-reported health and behaviors; clinical markers of health; healthcare spending or utilization; or absenteeism, tenure or job performance, according to the JAMA study.

One policy expert voiced concern that wellness incentives could backfire for those who don’t participate, or who don’t show healthier outcomes.

“Bottom line: if states take up this ‘demonstration project,’ insurers will be able to jack up premiums for people who can’t meet insurer-determined health targets,” tweeted Sabrina Corlette, a research professor at Georgetown University’s Center on Health Insurance Reforms.

CMS said in releasing the demonstration project that while rewards may be offered to enrollees who meet certain health standards, participating states must ensure that a reasonable alternative is offered to people who cannot achieve the wellness program standard because of a medical condition, including a pre-existing condition.


Employers have long offered their employees health-contingent wellness programs.

However, these kinds of wellness programs have been unavailable to consumers who purchase coverage in the individual market until now because the Affordable Care Act does not allow individual market health-contingent wellness programs outside of this demonstration project.


States and insurers would have new flexibility to design and offer wellness programs for individual market health plans that provide people with direct incentives to make healthier choices and achieve better health outcomes, CMS said.

Any state applying to participate in the wellness program demonstration project must clearly show that its program will not result in any decrease in coverage or increase in cost to the federal government in providing financial subsidies through the exchanges. States must also ensure that their wellness programs do not discriminate based on health status, CMS said.

States will be required to submit data regarding the number of participants, rewards provided, overall issuer cost savings, and changes in participant behavior and utilization or medical claims costs starting three years from receiving approval to participate and annually thereafter.

The Department of Health and Human Services, in collaboration with the Departments of Labor and the Treasury, will review this data to evaluate the wellness program demonstration project and determine whether to expand the demonstration project to permit additional states to participate in the future.


“Today’s announcement is another example of President Trump’s commitment to driving better health outcomes by offering states new flexibility to innovate and empower Americans to make the best healthcare decisions for themselves and their families,” said CMS Administrator Seema Verma. “Allowing states to implement these wellness programs in their individual markets offers the opportunity to not only improve the health of their residents but also to help reduce healthcare spending.”

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