Employee Wellness Progams May Be Key to Cost Control

Employer-sponsored family health care annual premiums increased just 4 percent in 2013, according to the Kaiser Family Foundation/Health Research & Educational Trust (HRET) 2013 Employer Health Benefits Survey. This is the second straight year where the increase was less than the year before. The 2012 increase was 4.5 percent, which was less than half of the 9.5 percent rise in 2011. In fact, the 2013 premium increase was the second lowest since Kaiser/HRET began conducting the survey in 1999. At that time, increases of more than 9 percent a year were common. Over the last 10 years, the average premium for family coverage has increased 80 percent, which is almost three times as fast as wages (31 percent) and inflation (27 percent). One of the keys to slowing that increase may just be employee wellness programs, as many large companies are finding them very successful as a means of controlling costs.

Benefits and Wellness Programs

The survey of more than 2,000 employers found 57 percent offering health benefits, a number that’s basically unchanged from last year’s 61 percent. What is changing, however, is that more than a third of employers with more than 200 workers are now tying at least part of an employee’s share of the bill to participation in a wellness program. These types of programs are becoming a popular strategy for employers trying to control costs.

The Kaiser/HRET report revealed that nearly all large employers (with at least 200 workers) offer at least one type of wellness program. These programs can take many forms and may target a variety of conditions. Over half of the large firms offering health benefits offer some kind of biometric screenings to measure workers’ health risks. Of these, 11% reward or penalize workers financially based on whether they achieve specific biometric outcomes. More than a third of these large employers who offer wellness programs may also offer some kind of financial incentive for workers to participate, such as lower premiums or a lower deductible, receiving a larger contribution to a tax-preferred savings account, or gift cards, cash or other direct financial incentives. Under the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148), employers will have broader use of financial incentives to encourage workers to improve their health status and outcomes.

“This will be an important issue to watch next year, as employers will have more flexibility and could ask workers to pay more because of their lifestyles and health conditions,” stated Kaiser VP Gary Claxton, the study’s lead investigator and director of the Foundation’s Health Care Marketplace Project.

According to the survey, in 2013, 35 percent of employers reveal that employee wellness programs are a very effective strategy for controlling costs. This strategy is proving to be the best method, as other strategies don’t even come close. Disease management (22 percent), consumer-driven health plans (20 percent) or higher cost sharing (17 percent) provide savings, but just can’t match employee wellness programs.

Going Too Far?

Of course, as with anything, where do you draw the line? One of the latest examples is the employee wellness program at Penn State. The college, which recently required employees to complete an online health assessment, is drawing criticism. According to Fox News, the university’s 40,000 employees have been told they must answer an online questionnaire as part of a school wellness program or have 100 dollars withheld from their paychecks every month.

“We are very happy to see the participation rates continuing to climb,” said Susan Basso, vice president for Human Resources. “I want to emphasize that while a major motivating factor in our health plan changes is cost-savings, equally important to us is the health and well-being of our employees. Good health care is more than paying for illness and treating symptoms. Good health care includes the prevention and management of modifiable risk factors. The wellness profile and biometric screenings create awareness for the employee of potential medical risks, and when you know about your risks you are empowered to address them to keep yourself healthy. Many risk factors, such as high blood pressure or high cholesterol, have no symptoms and can’t be detected without a screening, but knowing about them and getting them under control helps to avoid major health problems down the road.”

But not everyone is comfortable with the level of intrusion into the personal lives of Penn State’s employees. Penn State professor Matthew Woessner was quoted as commenting that the survey goes too far. It asks not just about height and weight, but also inquires about personal ailments, feelings of depression, use of tobacco, how much employees are drinking, and even whether male employees are conducting monthly testicular self-exams.

While this may seem like an intrusion, it may be accomplishing the goals of the program. Health issues are personal. Tools like the online assessment or biometric screenings may bring things to light or emphasize points that employees need to focus on. And with a 35 percent success rate in controlling costs,and the possibility of better health down the line, this may be just the ticket.