September 4, 2007
Today's Wellness Plans
Consumer Driven Healthcare is the new buzzword in health insurance. The concept of Consumer Driven Healthcare (CDH) brings the consumer back in to the fold of health care costs. CDH Plans now abound the health insurance landscape. Primary of importance for the effectiveness of CDH plans is the issue of wellness. Employers are increasingly more willing to explore new ideas as health care volatility continues to be such a challenge.
Wellness as a healthcare theme is not a new concept. Health Maintenance Organizations (HMO’s) have been around for decades and have promoted maintaining ones health as the name implies. The benefits of HMOs have always provided incentives for their members to take care of themselves through wellness incentives such as low Copay for immunizations, mammograms and PSAs. These features remain important to employers to control costs but also to the consumer to improve their wellness.
Other plans like Preferred Provider Organizations and Point-of-Service plans began to mirror the wellness strategy the HMO’s adopted as these plans grew in enrollment in the 1980’s and 1990’s. State mandates have required that health insurers provide wellness benefits to certain minimum levels.
Wellness of today still incorporates the ideas of old where folks need to be proactive to avoid disease and illness through preventive measures. However, much evidence reflects a large portion of our society does not head these incentives. Today employers are changing the way they offer benefits using a carrot and stick approach through subsidizing wellness and potentially changing behavior.
CDH plans use wellness as the foundation of these plans while providing financial vehicles such as Health Reimbursement Arrangements (HRA) and Health Savings Accounts (HAS) as vehicles to shelter funds to pay for health care expenses.
Employers may choose to put money in to an HRA or HSA account if employees loose weight, quit smoking or better manage a disease such as diabetes. The choices for health accounts are endless. However, employers must carefully evaluate their own company and the demographics, competition and an their industry to evaluate what is most suitable for their organization.
The wellness plans of today are attempting to address problems of our society by financially incenting individuals to modify their behavior and these incentives are increasingly becoming monetary as opposed to a more passive role that has historically been used.
The wellness programs of the future have their beta tests already completed. Hybrids of what the industry already uses and innovative ideas from the employer sector and health insurance sector will shape wellness programs of the future.
Our organization is working with an employer who is implementing a variety of wellness programs that illustrate the landscape of wellness of the future. This employer is offering a program that rewards employees for leading healthier lifestyles. If an individual joins a fitness center, the employer offers health insurance at a rate cheaper than an employee who does not join the fitness center.
With over 250 employees a local employer also is working with a nutrition and fitness vendor who develops programs that enable employees to manage their eating patterns and lead a healthier lifestyle. Employees are given points for participation in these programs and receive reduced insurance premiums.
Employers can put actual money in HRA’s and HSA’s to fund for these programs entirely or partially. The wellness programs of the future will offer online wellness tools, healthy vending machines and health coaches. Employers will be offering a whole menu of wellness options ala Carte’.
As an employer crosses the line of driving lifestyle choices, the benefits equation widens and becomes more complex. Many employers are concerned they are overstepping their role in health care. Many employers are concerned about unevenly introducing programs that might positively affect certain employees but adversely affect others.
No matter how an employer perceives their role, health care inflation continues to far outpace the CPI. Employers are seeking ways to lower costs on health insurance. Wellness programs provide the context to address part of the health care equation: healthier people will generally have lower health care costs.
Capturing the wellness market is the silver bullet that insurers and employers are loading in their arsenal. If an employer has a healthier work force, their health care costs should correlate in lower costs. Health insurers who manage claims for employers know this too and are developing many of the tools of wellness of the future.
The wellness plans of the future are forming today. The pieces of the puzzle are still in the box; the puzzle needs to be completed but is one of those puzzles with many small pieces. Employers who can put together the puzzle will likely be rewarded with a healthier work force, lower absenteeism and lower healthcare costs.
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