How are employers redesigning health plans and incentives to encourage wellness?
Many leading employers have migrated from offering encouragement or incidental rewards to employees who enroll in programs to refusing to subsidize employees who are unwilling to actively participate in health improvement programs or follow the specific recommendations from third-party wellness providers. Here are some examples.
- Reduced premiums and plan options. Employees who stop smoking, lose weight or lower their cholesterol may receive a credit toward their premiums or access to a more comprehensive health plan. Those who don’t must pay a greater share of their premiums or higher deductibles.
- Health savings account credits. Employers offering a high-deductible health plan contribute as much as $1,000 annually into the HSAs of healthy employees or those achieving specific outcomes. This is a high-impact option because premium reductions are apportioned over paychecks throughout the year, which dilutes the impact. Additionally, this incentive can be cost-neutral if employers offset the one-time payment through higher deductibles and co-pays — essentially allowing employees to buy back the increased cost-sharing through incentive payments.
Are employers instituting other penalties or incentives?
Self-insured employers are instituting more draconian plan changes to encourage employees to become wiser consumers of health care services. Controlling the unit cost of medical services and paying more for procedures from quality providers are proven strategies for reducing total costs. Examples include reference-based pricing, where employers set a price ceiling for medical procedures or tests after surveying the market. While prices for an MRI may vary widely, for example, there’s often little variance in the quality of these diagnostic tests.
Some employers are refusing to pay for elective but recommended surgeries until employees undergo a series of evaluations that may include a second opinion. Back surgeries often fall into this category and employees often elect alternative therapies once they understand the risks and the success rates for these procedures.
Last, some employers are opting to pay a higher portion of the cost for a procedure when employees select providers and facilities with higher success rates. Although procedure costs may be similar, the outcomes are not. New access to quality data is helping employers educate employees to make wise choices while strategic plan designs provide the financial motivation.
How are employers engaging entire families in wellness?
Given the ROI on wellness programs, employers are reaching out to entire families in order to improve total population health. Some companies are offering premium credits for spouses or dependents when they participate in wellness programs and achieve specific outcomes like reductions in weight or blood pressure. The most influential health consumer in the family may not be the employee but a spouse or significant other, so don’t overlook their ability to encourage wellness, especially when there’s money on the line.
Vincent Antonelli is a senior consultant for the health and group benefits practice at Towers Watson. Reach him at (415) 836-1240 or [email protected].