Transcript Slide 1

Best Practice for Employee Health Strategies
New Jersey Business Group on Health*
June 8, 2010
*A Division of the New York Business Group on Health
PSEG Company Overview
Public Service Enterprise Group (PSEG) is a publicly traded (NYSE:PEG) diversified energy company headquartered
in New Jersey, and one of the ten largest electric companies in the U.S.
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Total assets: $29 billion
Total annual revenues: $13.3 billion
Employees: Approximately 10,500
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65% Unionized
Average Age – 44
Average Years of Service - 16
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PSEG's principal subsidiaries are:
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Public Service Electric and Gas Company (PSE&G)
PSEG Power
PSEG Energy Holdings
PSEG Service Corporation
Reliability: In 2009 PSE&G was named for the fourth time as America's most reliable electric utility,
by receiving the prestigious National Reliability Excellence Award from the industry benchmarking
group, PA Consulting.
In 2003, PSEG celebrated its 100th anniversary.
PSEG has paid a dividend annually since 1907.
PSEG received NJBiz Magazine's 2007 New Jersey Corporation of the Year award for financial
results, leadership on environmental issues and commitment to New Jersey.
PSEG is ranked 101 on the 2008 Forbes 400 Best Big Companies list.
PSEG is ranked 190 on the 2009 Fortune 500 list.
In 2009, PSEG was named for a second year to the Dow Jones Sustainability North America Index
(DJSI North America).
PSEG was ranked 11 on New Jersey Business magazine's 2009 100 Top Employers list.
PSEG was recognized by New Jersey Monthly magazine as one of their 2009 Great Places to Work.
A Brief History of Culture Change
After 32 fatalities in 27 years, PSEG had to make major changes in the health and safety
culture.
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What was needed?
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A total commitment to transform the culture and a plan for action.
It wasn’t enough to say that health and safety is the #1 priority.
Hundreds of people got involved.
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Everyone - from meter readers, generating station workers, linemen, customer services representatives, office workers,
supervisors, managers and senior management – had to believe it and get involved!
Results could not be expected overnight
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Patience was necessary.
• Most best-in-class companies achieve significant culture change in 3-5 years through constant
reinforcement of the health and safety message, hard work, significant employee involvement,
and consistent support from management.
PSEG was on its way:
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We benchmarked best-in-class companies,
We took a long hard look at ourselves internally, and
We got lots of people involved to develop a plan for action that is now being implemented and continues to evolve.
A systematic approach would be required as the foundation for an accident-free work environment and a healthy
workforce.
Under strong leadership, PSEG has undergone a dramatic shift in its health & safety culture.
The results have been overwhelmingly positive.
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OSHA Recordable 1994 = 5.26
Target 2010 – 1.10
Health and Wellness At PSEG
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Wellness is Not Just a Program…
It’s a Health Improvement Strategy
StayWell
•Health Risk Assessment
•Lifestyle Management
•On Line Education/Resources
Hewitt
Your Benefits Desktop
Medifit
•On Site Fitness Facility Operations
•Health Promotion, Education/Communication
•Unstaffed Fitness Center Audits
•Exercise Reimbursement Program
•Weight Management and Nutrition
Coaching
Optimal Health
•Disease Management
Strategic Planning
Work/Life Life Solutions
•Employee Assistance Program
(EAP)
•CareBridge
PSEG
Employee Health
•Vendor Operations Management
•Partner Integration
•Program Development & Implementation
•Communications
•ROI Measurement
Community Outreach
Prevention Works-Pro-Activity
•Non Profits – AHA, ACS
•Pharmas
•Weight Watchers, NutriSystem
•On the Ground Physical Therapists
•Injury Prevention
•Education, Physical Activity and Nutrition
Counseling
•First Response Soft Tissue Injuries
Grass Roots
Health & Safety and Wellness
Council
On Site Health Services
•Communication
•Support
•Engagement
• Cardiovascular Disease Screenings
•Flu Shots
Absence Management
•Workers Comp – Work Hardening/Conditioning
•Wellness Program Integration/Awareness
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Health Plans
Resources
•Aetna
•Horizon BCBS
•Medco
Aramark
•Healthy Food Selections
•Cafeteria, Catering,
Vending
PSEG Workforce Health Profile
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Predominately Male
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Highly Unionized – 65%
Top 3 Diagnosis Related to
Disability Absence
Top 3 Diagnosis Related to
Medical Claim Payments
1. Orthopedics/Rheumatology
(Musculoskeletal)
2. Cardiology
3. Gastroenterology
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Top 3 Therapeutic Classes
Related to Rx Drug Payments
1. Cardiovascular
2. Anti infectives
3. Psychotherapeutics
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84% Male/16% Female
1. Musculoskeletal
2. Mental Health
3. Cardiovascular/All Other
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Demographics
Average Age: 44
Years of Service: 15.8
2009 Risk Factors
Top Risks
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Weight 79%
Eating 67%
Stress 60%
Blood Pressure 56%
Preventive Exams 54%
Exercise 45%
Back Pain 45%
Cholesterol 39%
Well Being (Depression) 20%
Smoking 12%
Overall Health Status
• Low risk 11%
• Medium risk 30%
• High risk 59%
Source: 2009 Health Risk Assessment and 2008 Biometrics from CVD Health Screenings
Number of Health Risks per Employee
75%
Percent of Employees
60%
59%
57%
53%
45%
39%
34%
30%
30%
15%
13%
11%
3%
0%
0-2 Risks
Healthy Company
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3-5 Risks
Norm
6+ Risks
PSEG
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Health and Safety – A Cultural Change Partner
Link ‘Health’ to Safety
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PSEG Health & Safety System
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Commitment Statement
Councils
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Enterprise (highest level)
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Lines of Business
Local
12 Components
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Personal Health & Wellness
Wellness Council
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Each work location has a Wellness
Representative
Local office health advocate
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Medical Director
Wellness Leader
Disseminate informational materials
Update bulletin boards
Tailgate messages
All Hands Wellness presentations
Personal Health & Wellness is Essential
to Achieving Safety’s Target Zero
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Individual health status is directly
linked to:
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The risk of being injured (both on
and off the job)
The severity of an injury
The duration of recovery/
recuperation of an injury
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Most significant predictor of injury
is health status, tobacco use, stress
level and weight.
Employees <35 and overweight
have 72% greater risk of injury.
Employees who perceive health
status as other than excellent have
65% greater risk of injury
Smokers, if injured, are 72% more
likely to have an incident resulting
in lost time.
Source: 2003 Union Pacific Railroad, Health & Safety Impact Study
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Health & Wellness Continuum
Take Control of Your Health with PSEG Health & Wellness Resources
Determine Your
Health Risks
• Health Risk
Assessment (HRA)
• Health Screenings
Build Health in
Your Routine
Get the Right Care
At the Right time
• NextSteps Lifestyle
Management
• EAP
• CHAMP Fitness Centers
• Prevention Works
• Exercise Reimbursement
• CareBridge
• Staywell Online Tools &
Helpline
• Health Plan Resources
Manage Chronic
Health Conditions
• Optimal Health
Disease
Management
•Weight Watchers/ NutriSystem
•Influenza Vaccines
Supported by Health Education and Information
Visit Your Benefits Desktop often for the latest information about your benefits, health and
wellness...there is always something new.
http://www.pseg.com/benefits
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Driving Results through Participation/Engagement…
2008 Wellness Scorecard
% of Employees Participating in ….
Company
0 Programs
1 Program
2 Programs
3+ Programs
PSEG Overall
26.1%
15.6%
16.2%
42.1%
Holdings
43.4%
22.6%
21.7%
12.3%
PSE&G
26.1%
15.6%
16.2%
42.1%
PSEG Power
35.4%
20.6%
14.5%
29.6%
Services
17.2%
13.4%
14.8%
54.5%
Engaging the Right People (93% are Moderate to High Risk)
Participation in more Programs produces Higher Results
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Participation in 1 program vs. 5 programs
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Medical/Rx Drug Costs – 5% lower
WC & Disability Lost Time – 19% lower
Disability Recurrence Rates – 7.1% lower
TARGET
60% in
3 or more
programs
The Impact of
PSEG’s Health Management Strategy
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A comprehensive evaluation plan to assess PSEG’s health management strategy
outcomes was recently completed.
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The study focused on:
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Health wellness program participation rates,
characteristics of participants and non-participants in PSEG’s health/wellness programs,
health outcomes, and
medical and productivity cost impact over time.
Findings - PSEG’s health wellness programs are showing signs of success:
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Employees who are engaged in their health by participating in PSEG’s health wellness
programs are showing lower health care and absenteeism/disability costs and trends.
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Program participation shows a dose-effect with more medical and productivity cost moderation
associated with higher levels of participation (2+ program vs. 1 program vs. never participants)
Cost-benefit analysis demonstrates an overall program ROI of 1.1 (medical costs only)
and 1.46 (medical and productivity) after the second year of the program.
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PSEG’s ROI reflects results since redesign and launch of it’s health and wellness program since 2008.
An ROI of 1:1 (i.e. breakeven) is considered reasonable for earlier years of program implementation.
According to the National Business Group on Health*
• A mature, comprehensive health management program with a highly engaged population can
expect to see a minimum $3 return for ever $1 invested (3:1) after 3 to 5 years.
* Source: National Business Group on Health, (2008) Improving Employee Health – Planning, Implementing and Achieving Targeted Outcomes, p.5.
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Health Wellness Program Participation Impact on
Employees – Medical & Drug Cost and Trends
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Employees who were enrolled in a medical plan
from 2006 – 2008 were classified into one of three
categories (N=8,451) to determine the impact of
participation in PSEG’s health/wellness programs
on health care and absenteeism/disability costs
and trends.
1. Never Participant: Employees who did not
participate in a program 2007 and 2008
2. 1 Program Participant: Employees who
participated in one program in 2007 or 2008
3. 2+ Program Participant: Employees who
participated in two or more programs in 2007
and/or 2008
Cost Trends for Employees**
Medical + Drug Costs (N=8,451)
$5,000
Never participant (N=2,265)
$4,000
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Those individuals who participate in
multiply health/wellness programs have
lower health care costs.
From 2006 to 2008, the ‘2+ program’
participant group experienced a 26%
increase in health care costs while the
‘never participant’ group increased
68%.
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$3,784
Individuals engaged in their
health tend to have lower
health care costs.
$3,870
$3,702
$3,083
$3,398
$3,012
Medical cost trends show a dose-effect*
as program participation increases.
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$4,272
2+ program participant (N=4,965)
$3,000
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$4,551
1 program participant (N=1,221)
$2,704
$2,000
2006
2007
2008
*Increasing impact on cost outcomes is evident with increasing program intensity
**Employees enrolled in medical coverage during all reporting years
2006
2008
$ Change
% Change
Never Participated
$ 2,704
$ 4,551
$ 1,847
68%
1 Program
$ 3,012
$ 4,272
$ 1,260
42%
2+ Programs
$ 3,083
$ 3,870
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26%
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Health Wellness Program Participation Impact on
Employees – Lost Productivity Cost and Trends
Lost productivity cost trends for
absenteeism/ disability also shows a
dose-effect* as program participation
increases.
 Those individuals who participate in
multiply health/wellness programs
have lower absenteeism/disability
costs.
 From 2007 to 2008, the ‘never
participated’ group showed the
highest increase (8%) while the ‘2+
program’ participant group showed
a slight decrease (-1%).
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Individuals who are engaged in
their health tend to have less
absences.
Absenteeism/Disability Costs for Employees**
(N=8,451)
$4,000
$3,134
$2,897
$2,640
$3,000
$2,714
$2,104
$2,085
$2,000
Never Participant (N=2,265)
1 Program Participant (N= 1,221)
2+ Program Participant (N= 4,965)
$1,000
$0
2007
2008
*Increasing impact on cost outcomes is evident with increasing program intensity
**Employees enrolled in medical coverage during all reporting years
2007
2008
$ Change
% Change
Never Participated
$ 2,897
$ 3,134
$ 237
8%
1 Program
$ 2,640
$ 2,714
$
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3%
2+ Programs
$ 2,104
$ 2,085
$ (19)
-1%
Health Wellness Program Participation…
Always a Challenge
Health Wellness Program Participation 2007 - 2009
Disease Mgmt
Lifestyle Mgmt
Prevention Works
EAP
Exercise Reimb ursement
CHAMP
Influenza Vaccines
CVD Screening
HRA
0
1,000
HRA
CVD
Screening
2,000
Influenza
Vaccines
3,000
CHAMP
Exercise
Reimb urse
ment
4,000
EAP
5,000
Prevention
Works
Lifestyle
Mgmt
6,000
Disease
Mgmt
2009
3,448
2,608
4,313
978
708
867
884
953
1,492
2008
4,125
4,254
3,941
1,149
509
862
5,267
1,251
1,469
2007
1,067
4,135
3,524
958
474
1,030
3,885
294
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PSEG utilizes 9 Best Practice Elements to Maximize Participation and Engagement:
•Comprehensive program design
•Integrated incentives
•Integrated, comprehensive communication plan
•Strong senior management support
•Dedicated onsite staff
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•Multiple program modalities (phone, mail, online)
•Population-based awareness building activities
•Biometric health screenings
•Vendor integration
What’s Next?
A Continuous Improvement Process
Culture
Communications
The “Three Pillars”
of Engagement
Incentives
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Leadership
The Evolution of Health Management
• Worksite Wellness – the 1980s
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Worksite-based – HRA/screening & group education and activities
Unmanaged, reactive individual support
Strength may have been cultural focus
• Targeted High-Risk Intervention – the 1990s
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HRA/screening & targeted individual follow-up intervention
Stimulated by risk-cost research
Focus on high-risk segment
• Total Health Management – the 2000s
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Enabled by technology – delivered at and away from work
Shaped by integration of wellness & disease management
Manages total population across entire health continuum
Addresses all health needs with integrated services, data, outcomes
Renewed recognition of importance of culture and work environment
Timing of Key Health Care Reform Provisions for
Active Employees Health Plans
• Extension of Adult Child
to Age 26*
• Preventive services and
immunizations at no
cost to employees*
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• Lifetime Limits and
restrictive annual limits
• Employer
distribution of
uniform summary
of benefits to
participants
• Employer Quality
of Care Report
Prohibited*
• Preexisting conditions
exclusion prohibited for
children under 19*
• CLASS enrollment
(voluntary long term
care)
• Flexible Spending
Accounts – OTC drugs
not covered
• HSAs: Non qualified
withdrawal penalty to
20%
• Employer reporting of
health coverage on 2011
Form W-2
2011
2012
• Notice to inform
employees of
coverage options
in exchange
• Limit on Flexible
Savings Account
Contribution
reduced to
$2,500
• Tax increase on
high-income
individuals
• Individual Mandate to Purchase
Insurance or Pay Penalty
• States establish Health
Insurance Exchanges where
individuals can purchase health
insurance
• Employer Responsibility to
Provide Minimum Health
Coverage
• Free Choice Vouchers
• Preexisting conditions
exclusions prohibited for
everyone
• Cap on rewards for
participating in wellness
programs increased from
20% to 30% of cost of
employees coverage.
2013
2014
*For Collectively Bargained Agreements – effective after date of new contract.
**Clarification on regulations is needed for what may be considered ‘grandfathered’.
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• Excise tax on highcost health plans
effective
2018
Use of Incentives in Wellness – US Employers
Source: Buck Consultants, Working Well: A Global Survey of Health Promotion and
Workplace Wellness Strategies, November 2009.
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Types of Incentives Offered – US Employers
Offer today
Plan in 2-3 years
Plan for next year
Not planned
Gifts/Merchandise
54%
11% 10%
24%
Raffles/Drawings
54%
11% 10%
24%
52%
Free/low-cost preventive services
40%
Cash
37%
Reimbursement for classes
32%
Premium/copay reduction
29%
Subsidized gym membership
19%
HSA/Spending account contribution
Vacation days/Paid time off
7% 10%
8%
8% 7%
20%
45%
9% 14%
13%
40%
23%
32%
6% 11%
54%
18%
55%
11% 7% 12%
0%
31%
70%
40%
60%
80%
Source: Buck Consultants, Working Well: A Global Survey of Health Promotion and
Workplace Wellness Strategies, October 2008.
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100%
Advantages of Health Plan Integration
 Potential to integrate into “organizational fabric”
 Communicates and reinforces the link between behavior,
health and cost of sick care
 Maximizes incentive value at less or no cost
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$200 reward costs employer $200 plus administrative costs, and employee only gets
$120-150 after taxes;
BUT
$200 premium reduction can cost employer nothing
• Assume 60% compliance with required behavior
• 60% get $200 reduction, which costs employer $120 per employee (i.e., $200 times
60%)
• With next premium increase, raise premiums an extra $120 to cover cost of
incentive payouts
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2011 - 2013 PSEG Program Framework
Strategic
Planning
• Population-based
approach to total health
management
• Strategic planning
– Annual plan
– Long-term plan
– Align vendor
partner strategic
plans with overall
plans
Engagement
Methods
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Leadership
Engagement
• Senior leadership
– Budget allocation
– Supportive policies
– Active engagement
in program
promotion
– Operational
accountability
• Healthy Leaders, Healthy
Leadership
• Communications
– Multiple channels
and media
– Focus on HA,
follow-up programs,
and other resources
available to all
employees
Program
Level
Management
Best Practice
Program
Components
Measurement
& Evaluation
• Integration
– Vendor Summits and
regular calls
– Use Nurse Line
Navigational service
to best triage
participants to
appropriate services
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Health Assessment
Lifestyle Management
Disease Management
Fitness Centers
Exercise Reimbursement
Injury Prevention
EAP
Work/Life Resources
Biometric screenings and
flu shots
• Population-based
campaign
• Data on participation,
satisfaction and process
evaluation
• Outcomes measurement
and program evaluation
planning and alignment
with overall strategy
• Meaningful reports to key
stakeholders
• Annual print piece
– Explain previous
year results
– Impact on health
care costs at PSEG
• Wellness Council training
– Lunch ‘n learns
– Quarterly focus
– Bulletin boards
– Stop-by booths
– Informal discussions
• Long-term incentive
strategy based on
sustainable outcomes
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Link to benefit
design
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Tips to Avoid Unintended Consequences
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Align and strengthen all “three pillars of engagement”
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Minimize use of “do this, get that” communications
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Keep it credible by making “gaming the system” difficult or risky
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Plan for future sustainability
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Assure compliance with HIPAA, Health Care Reform, and ADA
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Caps incentives at 30% of health coverage cost
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Discrimination rules related to “health status factors”
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Reasonable alternatives and consistent communications
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Annual qualification requirement
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Consult with your legal counsel
Thank You…
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