Corporate unwellness

Thirty years later, two-thirds of the U.S. population is overweight, and companies are realizing that employees with unhealthy habits may need to compensate for the strain they place on a company’s health plan.

Among employers who offer financial incentives, employee participation rates are 46%, compared with 19% for those that do not offer incentives.

And depending on which side of the paycheck someone sits, an “incentive” easily could be seen as a punishment.

Cooper Johnson, vice president of sales for Maschino, Hudelson and Associates, an employee-benefits management firm in Oklahoma City, helps more than 300 companies select their benefits each year. He says he’s seen renewal premiums for 2012 range from 5% decreases for companies with good loss ratios, to 40% premium increases for those with higher losses.

“There’s got to be some cost-shifting along the way,” he says. “Employers can’t, over time, continue to pay more and more and more for health care without there being some [kind] of shift to an employee.”

Employers continually are deciding how much of employees’ health care premiums they want to cover, he says.

Other
ways to save money are increasing deductibles for the overall plan and
allowing employees to buy the lower deductible plan.

TOUCHÉ
While
employers in Oklahoma aren’t permitted to increase an employee’s health
insurance rate for risk factors outright, there are ways to have the
employee share in the burden.

“If an employer has a wellness program in place, that kind of becomes the vehicle for that cost-shifting,” Johnson says.

In
the case of smokers, he says a company can offer a smoking cessation
program for at least one year before increasing rates if an employee
doesn’t kick the habit.

Shad Glass, human resources director for Kimray, says the company realized a few years ago that a wellness plan was a must.

In the HR world, Glass says the move is toward employers making employees pay for their unhealthy habits.

“I
think that’s going to be the trend you’ll see going forward. It makes
sense,” he says. “If you have an employee who’s a higher risk, then why
should they not pay a greater portion of their premium? We’re a big
believer that the best way to save money in your long-term health care
is to keep your healthy people healthy.”

Employees
at Kimray can reduce their monthly premiums by as much as half if they
choose to participate in the company’s wellness program.

“I
think you’re going to see that with the new health care laws in place
and just health care in general going up,” he says. “There’s no question
about it. It’s big business, and employers have to come to grips with
how they’re going to be able to provide that benefit to their employees,
but sustainability is the key. We have got to be able to sustain that
over time to afford it.”

At
the end of 2011, the self-funded Kimray plan paid 91% of employees’
health care costs, but began offering higher deductible plans and health
savings accounts as additional options.

Glass
says the company puts $1,000 into an HSA account for employees with a
$1,500 deductible plan, and families get $2,000 on a $3,000 deductible
plan.

With health care costs rising, Johnson says employers may feel more like health insurance underwriters when they hire.

“I
don’t think anyone is coming out directly and doing that, because you
can’t, but maybe subconsciously,” he says. “There are two ways to try
and improve your health care costs: One is trying to improve the health
of your current employees through wellness programs and initiatives. The
other would be when you’re hiring, you end up hiring someone
subconsciously who is healthier.”

Photo by Mark Hancock

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