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Life Health > Health Insurance > Life Insurance Strategies

Wellness Benefits Are Expanding Into The Small Business Market

By Jerry L. Ripperger

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Wellness programs hold great promise for employers. Employers are seeing significant financial returns and improved employee health. As a result, wellness programs are evolving and an increasing number of employers are adopting the programs. Many are embracing the movement by amending their health benefit programs to encourage positive lifestyle behaviors.

Several trends have emerged which help to define the next generation of wellness programs.

An emphasis on employers of all sizes. Large employers have embraced wellness for the last several decades and have numerous choices of programs and service providers. Until recently, smaller employers have not had the same flexibility, but this is changing as a result of two innovations.

Health insurers are increasingly providing robust wellness programs along with their health insurance. This integration provides a cost-effective method to distribute the wellness program to employers. In addition, education and enrollment efforts can be combined, minimizing the time commitment and reinforcing the close link between the programs.

Wellness providers have also developed screening methods that allow small employers to participate on a cost-effective basis. In addition to using on-site screening methods, the use of collection centers in alternate locations like grocery store pharmacies has decreased overall costs. Physician packets are also becoming increasingly popular.

Greater depth of programs. Robust wellness programs include 4 core components: (1) observation and evaluation, (2) targeted health management, (3) positive lifestyle information and education, and (4) actuarial reporting, administration and management. The focus of these programs is typically on the prevention and reduction of risks associated with common health conditions.

Many employers are looking to go further, wanting to include conditions that have been specifically identified by their insurer or claims administrator as important to their employee population. Ultimately their goal is to identify conditions that can be improved to provide a return on investment. These additional screenings can include:

? Metabolic panel.

? Prostate specific antigen.

? Vision screening.

In addition, wellness providers focus on giving individuals personalized coaching based on their needs, rather than a one-size-fits-all approach.

Movement to no additional fixed costs. Historically, employers have offered incentives to encourage their employees to participate in wellness activities. Common approaches include providing a premium incentive such as $10 per pay period. Another benefit commonly offered is an increased employer contribution to a health savings account.

These incentives have been used to entice participation in a health screenings or health improvement activities. Employers viewed these extra costs as an investment, anticipating that a wellness program would bring lower claims costs and higher productivity.

Employers continue to view wellness as an investment, but are looking for ways to offset costs associated with incentives. Some feel their only option is to use increased costs for those who don’t engage in health improvement activities. It is likely that many employers will structure this as a reward. For example, an employer determines employees will need to contribute $50 per pay period for health coverage. In order to create an incentive to participate in the wellness program, they set the employee contribution at $75 but offer a $25 incentive, netting out to the $50 they budgeted.

Some employers are philosophically opposed to rewarding employees for doing what the employer feels they should have been doing all along. These employers are opposed to paying someone to abstain or quit using tobacco. Instead, they feel employees who elect to use tobacco should pay a surcharge because employees should already know using tobacco is detrimental to their health. Although this is a small number of employers, their actions often gain significant attention.

Integration into the health benefit program. Employers commonly offer wellness benefits alongside their health benefits. They create links between the programs typically through employee premium differences. In an increasing number of geographic areas, new innovative offerings are being launched that fully integrate wellness and health benefits program.

The program offers 2 different benefit levels. For example, an enhanced benefit level could have a $500 deductible and a $1,500 out-of-pocket limit. A standard benefit level could have a $1,500 deductible and $3,000 out-of-pocket. Both benefit levels will have the same covered charges and limitations.

When enrolling for benefits, the employees (and often spouses) undergo a wellness screening. The wellness screening examines 5 key items:

? Body mass index.

? Blood pressure.

? Cholesterol.

? Blood sugar.

? Smoking status.

The results of the screening are then used to determine which benefit level the employee receives. If employees meet a certain health status threshold, they will be automatically placed in the enhanced benefit level.

The incentive program is designed to encourage participation and a commitment to improve health. It is important to note that the employee contributions are the same for the enhanced and standard benefits as most programs structure the benefit differences to take full advantage of the 20% differential allowed by HIPAA.

Wellness benefits are rapidly evolving, allowing increasing numbers of employers and their employees to benefit from the programs. Employers of all sizes are finding solutions that allow them to integrate wellness into their health benefits.

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