State health plan adds mandatory wellness program

State employees receiving government health benefits will be required to participate in a wellness program next year or pay a penalty, starting at $50 per year.

Those who do meet requirements of the new wellness program will be rewarded by having all of their primary-care copayments waived for that year.

Participation in the wellness program will be required of all state employees, retirees and their enrolled spouses beginning Jan. 1. Children are exempt, as are Medicare-eligible individuals.

Anne Timmons, director of state employee benefits, said the wellness program was designed to help rein in the increasing costs of providing health insurance to workers and their families while nudging people toward a healthier lifestyle.

Timmons said the program is projected to slash the state’s costs by $4 billion over the next decade. Instead of spending an estimated $20 billion on medical and drug expenses, the state might spend $16 billion, she said.

Jeff Pittman, a spokesman for the Maryland chapter of the American Federation of State, County and Municipal Employees, said union members are “by and large” OK with the new program.

“It looked like premiums were going to go up for everyone across the board,” Pittman said. “So we thought, well, it’s better to have a wellness program where people can control whether their costs go up or down.”

Even with the new requirements, Timmons said, individuals can still make their own decisions.

“They can choose to not do these activities and pay more,” she said. “But I don’t think it’s fair for the rest of the enrolled population to pay more in higher premiums to cover the people who are choosing not to be healthy.”

Meeting the requirements of the wellness program should be relatively easy at first, several people said. But after the first year, compliance will become more complicated, particularly for people with chronic diseases.

In 2015, enrollees are required to do three things. First, they must officially designate an in-network primary care physician as their go-to provider.

Then, they must complete a “health risk assessment,” either by filling out an online form or requesting a paper copy. Finally, enrollees must personally review their health risk assessment with their physician, who must sign off on the report.

For each enrolled individual who doesn’t meet those requirements during 2015, the employee or retiree will have a $50 surcharge deducted from their pay, starting in January of 2016. Spread out over the year, that comes to $4.16 per month.

In 2016, additional requirements go into effect. All enrollees must complete either a nutrition education program or weight management program sponsored by their insurance carrier.

Additionally, all enrollees must receive whatever health screenings are recommended for people of their age and gender — such as mammograms or colonoscopies. The surcharge for noncompliance in 2016 increases to $75, which will be taken out of their pay in 2017.

Furthermore, enrollees determined to have an unmanaged chronic condition, such as diabetes, will be required to actively participate in a disease management program sponsored by their insurer.

That individual will work with a nurse to design a personalized treatment plan. The penalty for not adhering to that plan — such as failing to show up for scheduled check-ins — is an additional $250 per year, potentially on top of the $75 fee.

If that individual does not meet the disease management requirements in 2017, the surcharge increases to $375.

That means a state employee with diabetes who doesn’t meet any of the requirements in 2017 could end up handing $450 back to the state — or more, if officials decide to also increase the other surcharge.

Three years from now, state officials will evaluate the wellness program and potentially make changes.

For example, the program is currently “participation-based” — enrollees can avoid the surcharge simply by participating in the required activities, such as weight-loss or smoking-cessation programs.

Enrollees aren’t penalized if they don’t lose weight or quit smoking. But in the future, the program might become “outcomes-based,” Timmons said.

Of the 255,000 people covered by state health insurance, many have chronic medical conditions, and many are doing a poor job managing their disease, Timmons said. That’s where the bulk of the state’s medical bills come from.

Wellness programs are geared toward that high-cost population because that’s where the potential savings are, said Paul Fronstin, a senior research associate at the Employee Benefit Research Institute.

Wellness programs are still relatively new, even among the private sector, Fronstin said, but he expects them to become more common. As for whether the programs truly save employers money and improve workers’ health, “the literature is all over the map on that,” Fronstin said.

“Simply having this program doesn’t necessarily mean it’s going to be effective,” he said. “It may take time; it may take changing the options in the cafeteria. It’s not as simple as offering a financial incentive and assuming people are going to take it.”