By Jonnelle Marte
Last Update: 3:39 PM ET Oct 4, 2012
As open enrollment season gets underway for employer-provided health-insurance plans, consumers are facing the now-familiar burden of higher premiums. But many will get new opportunities to cut their costs or get money backin some cases, oddly enough, by going to the doctor more often.
Its all part of a growing effort by employers to encourage their employees to adopt healthier habitsfor their own sake, and for the sake of the corporate bottom line. Companies are encouraging their staff to participate in wellness programs, get annual checkups or use preventive services aimed at identifying health risks early. Such programs have been around for a while, but statistics show that the financial rewards are getting larger, and becoming more common.
Health-incentive payouts usually take the form of gift cards, contributions to health savings accounts or reductions of premiums. The median incentive offered is expected to grow to $450 in 2013, up from $250 in 2011, according to the National Business Group on Health. A $450 incentive would represent a little under 10% of the average employees share of health expensesa not-insignificant discount.
About 41% of large firms with wellness programs offered such financial incentives this year for employees who participated in wellness programs, up from 27% in 2011, according to an annual survey by the Kaiser Family Foundation and Health Research & Educational Trust.
The growing popularity of these programs comes at a time when health care costs are rising for workers and employers alike. Projections released this week by human resources consultant Aon Hewitt show that employees share of health costs will reach an average of $4,814 next year, up about 50% from 2008. Employers, meanwhile, spent an average 8.5% of total compensation on health insurance costs in 2012, up from 5.5% in 2000, according to the Bureau of Labor Statistics.
Companies say the incentives could help them lower long term health costs by creating a healthier work force. We know health equals productivity and productivity equals better business results, says David Kasiarz, senior vice president of Global Compensation and Benefits at American Express.
A typical corporate wellness program might start off by offering rewards for completing a biometric screening, a workup that checks for high cholesterol, blood pressure and early signs of diabetes, among other measures. At American Express, for example, employees can earn up to $400 for their tax-deferred health savings accounts if they complete a wellness questionnaire and meet with a health coach. This year, those who submitted their questionnaires by the end of April had the chance to get six months of their premiums paid.
Employees at some American Express offices can also earn gift cards for getting an annual physical. And a program aimed at reducing at-risk births rewards mothers who check in with a maternity nurse at certain milestones throughout their pregnancy.
Experts say the jury is still out on how much these programs will save companies. While employers can measure what percentage of their workforce participates in a walking program, quits smoking or takes a biometric exam, benefits and savings elsewhere can be hard to measure. Unless you have a results componentits difficult to see whether or not you have made a difference, says Rita Numerof, president of Numerof & Associates, a strategy consulting firm specializing in global health care.
For employees, concerns about the programs can be deeper and more personal. Some companies already go beyond rewarding healthy behavior to start measuring outcomes and sometimes penalizing less-healthy results. Eleven percent of the large firms surveyed by Kaiser said workers who discovered health risks during their wellness assessments were required to enter a health management program or take other measures in order to avoid a financial penalty like a higher premium. A slightly lower percentage of large firms said they rewarded or penalized employees financially based on specific biometric outcomes, such as reaching a certain body mass index or cholesterol level.
Some groups are pushing back against incentive programs. For example, The Obesity Society, a society of clinicians and researches who study obesity, has recommended against programs that reward workers for maintaining a certain weight or body mass index. The society argues that people who are not overweight can still have chronic conditions like diabetes or hypertension, and that some people who are overweight lead healthy lifestyles.
But insurers and employers say that such concerns are outweighed by the overall benefits. One way to measure success, while respecting workers privacy, is to track changes for certain health metrics, such as cholesterol levels or body mass index, for the workforce as a whole, says Tom Meier, vice president of product development for Health Care Service Corporation, an operator of Blue Cross and Blue Shield Plans in Illinois, New Mexico, Oklahoma and Texas. Meier says his firm works with several companies that offer incentive programs for their employees. Youve now identified they might have a chronic condition, says Mr. Meier. So what can you do to get them to act on it?