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An Ounce of Prevention Also Can Cut Disability Costs

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We are all aware of the shift in responsibility that has taken place with benefits over the past few years – employees are becoming increasingly accountable for funding their benefits and retirement packages. What does this mean for the future of benefits plans? Employee risk has escalated, and offerings that protect against this risk have become a critical workplace need.

To help meet this growing need as well as achieve their own benefits objectives, companies have begun to look at benefit programs more strategically and offer employees a broader portfolio of benefits, often times through voluntary or employee-paid mechanisms. Additionally, as employers reevaluate their role and fiscal commitment regarding health care, many are realizing the need to take on a greater stewardship of health, wellness, primary care and prevention by creating a culture of health and financial security. It is more beneficial to both employers and employees to prevent the occurrence of cancer than to treat it.

Recently, employers have become increasingly committed to creating benefits programs that encourage employees’ health and financial wellbeing. Many companies have started a movement that has created a shift away from a health[s1] infrastructure that rewards acute and tertiary care to one that encourages wellness and prevention. According to MetLife’s Fifth Annual Employee Benefits Trend Study, 28% of all employers – and 49% of companies with 500 or more employees – offer some type of a wellness program as a workplace benefit.

These wellness and preventions programs, aimed at helping employees make better lifestyle decisions (regular screenings, quitting smoking, losing weight, etc.) – can help employers impact their employees’ health. While better health obviously helps impact medical costs expenditures, it can also have an effect on the number of incidences of disability and their duration.

The top two employer benefits objectives, according to MetLife research, are employee retention and controlling health care costs. Benefits programs that include wellness and prevention programs can help achieve both objectives and, importantly more employers are recognizing that.

Among employer respondents to the Employee Benefits Trend Study:

- 35% fund employee assistance programs, up from 25% the prior year.

- 17% – and 34% with 500 or more employees – offer targeted prevention programs.

- 14% – and 28% with 500 or more employees – provide onsite clinics.

However, as the statistics also indicate there is great opportunity for more employers to effectively impact their medical and disability costs, employer productivity and long-term health by adding these benefits. The above findings also provide a good starting point for brokers or consultants to address these issues with their clients, so they can make more strategic and cost effective choices when it comes to benefits.

In addition, an aging workforce also affects disability. Typically, as people age, they face an increased number of health issues. As a result, staying healthy when one is younger can make a significant difference as one ages. Staying healthy can help prevent premature withdrawal of savings, being able to have a longer work span in the workforce, and mitigate medical costs now and in retirement. Health care costs in retirement are a top concern for many employees even those that are younger. About 48% of Generation Y employees and 60% of Generation X employees who participated in the MetLife benefits trends study said they are very concerned about being able to afford health care in their retirement years.

An employer who spends a dollar now on preventive care is offsetting the potential of spending thousands of dollars later for more serious medical conditions. In this era of increased consumerism, both employers and employees are the recipients of these savings.




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