Focus On: Workplace Wellness: New Workplace Wellness Regulations Released; Too Soon to Tell If Labs Will Benefit

The U.S. Department of Health and Human Services (HHS), Internal Revenue Service, and Employee Benefits Security Administration have released final rules regarding workplace wellness incentive programs under the Affordable Care Act (ACA). These programs could present an opportunity for laboratories whose management is challenged about how to derive new revenue streams from the health care reform law.

The ACA contained provisions to promote healthy habits in the workplace when the legislation was originally signed into law in 2010. HHS spent the next three years developing the rules. The major provisions of the ACA—including the health insurance exchanges for small employers to purchase coverage—will be implemented on Jan. 1, 2014.

Workplace wellness has been an issue for years even before the passage of the ACA, particularly with rising rates of obesity, diabetes, and their related health issues. That, along with mental health issues such as depression, cost U.S. businesses hundreds of billions of dollars a year. Smoking, although it has declined dramatically since the 1970s and been banned in most workplaces, still costs businesses as much as $96 billion a year, according to the Morbidity and Mortality Report, a publication of the Centers for Disease Control and Prevention. However, some recent studies suggest much of the loss is tied to smoking breaks taken during work rather than illness.

Many larger employers have been pushing programs to encourage employees to stop smoking or lose weight and to exercise more regularly. Workers often receive incentives such as gift cards or small cash bonuses in return for meeting specific benchmarks.

Under the ACA, wellness programs are divided into two areas: participatory wellness programs that encourage gym use and some diagnostic testing in order to establish a health care benchmark. Health-contingent programs rely more deeply on testing of special medical conditions such as high levels of blood sugar and cholesterol.

Possible Bump in Testing

The ACA’s myriad of rules have presented a challenge for some laboratories. Large providers such as hospitals receive incentives if they improve and better coordinate care, and clinical laboratories can play a key part in helping hospitals reach their goals.

What’s more, industry experts say that wellness programs under the ACA could create a bump upward in diagnostic testing.

“With a greater emphasis on workplace wellness we may see an increase in screening for some conditions such as cholesterol and lipid panels, tests for monitoring diabetes such as hemoglobin A1c,” said Francisco Velázquez, M.D., chief executive officer of PAML Laboratory in Spokane, Wash. Such tests are typically bread-and-butter tests with relatively low prices.

However, Velázquez stopped short of predicting volumes.

“Wellness as a discipline and clinical effort has been difficult to quantitate from a laboratory perspective,” he said.

According to Velázquez, the spending data that are available indicate the average U.S. household spends $148.50 a month on products with a “wellness halo” such as healthy foods and vitamins and related supplements. But of that, only about $10—around 7 percent of the total—is spent on clinically related or diagnostic items such as blood pressure tests.

However, the ACA provisions contain some fairly generous incentives to improve workplace health—employer groups can give their workers as much as 30 percent of the overall cost of an employer’s health care plan and as much as 50 percent if it involves smoking cessation.

The regulations also encourage employees to improve their glucose and cholesterol levels—both benchmarks that call for regular laboratory testing.

But a big question is how employer groups will structure their wellness efforts. According to the regulations, the less diagnostic-oriented participatory wellness programs have been the majority of such efforts, and that is expected to be unchanged under the ACA.

The employment-based wellness rules were published in the June 3, 2013, Federal Register (

Moreover, the regulations require that employers provide alternatives to the outcome-based wellness programs so as to avoid any risk that such testing is a subterfuge for discrimination or insurance underwriting based on a health factor.

“There are a lot of different configurations for these kind of initiatives,” said Donald Crane, chief executive officer of the California Association of Physician Groups (CAPG).

One such successful program involved CAPG members and health plan enrollees associated with the California Public Employees Retirement System in Santa Cruz County, Calif., which was launched in 2011. But Crane noted that while that specific program showed a dramatic increase in employee health indicators, much of that was connected to improved diets and smoking cessation. “I don’t know if it really translated into a big medical spend” such as laboratory testing, Crane noted.

According to Velázquez, there are some wellness programs that use a laboratory test for cotinine, a metabolite associated with nicotine consumption and smoking, although it is unclear whether volumes for such a test might grow, even with the relatively generous incentives associated with the new ACA rules.

“It remains an episodic test as employers have been reluctant to use it, since nonsmoking environments do not preclude smoking outside of work,” he said.


You have 2 articles left to view this month.

Your 3 Free Articles Per Month Goes Very Quickly!
Get a 3 month Premium Membership to
one of our G2 Newsletters today!

Click on one of the Newsletters below to sign up now and get unlimited access to all articles, archives, and tools for that specific newsletter!









Try Premium Membership