Design of an effective wellness program requires collaboration between insurance brokers, benefit providers and legal advisers. There are particular considerations relating to HIPAA’s Nondiscrimination Requirements which I will discuss in my next post. Before we get to that, I am pleased to share the following contribution from Steven P. Buterbaugh, CPCU, AAI of E.K. McConkey & Co. Insurance. Thank you to Steven for being our first guest blogger.
Wellness Programs Have Positive Impact on Group Health Insurance and Overall Company Productivity
Businesses are under constant and increasing pressure to find ways to manage and reduce health benefit expenses while maintaining or improving employee morale and productivity.
Benefit redesign and changing employee contributions are often the first options to consider, but these can strain the important relationship between employer and employees. Significant long term savings will only occur when member health is actually improved, and this is where a wellness initiative can make an impact.
There is a wide disparity between the average claims and cost/person for someone who has a chronic illness and the average claims and cost/person for someone with non-chronic illness. (See Chart)
As we often are reminded through the media, there has been an increasing prevalence of chronic illness in our society including Obesity, Diabetes, and Heart Disease. Following are some compelling statistics:
- Obesity- The CDC’s Health-E Stats for 1999-2002 show that 64% of adults in America age 20 and over are overweight or obese.
- Diabetes- the National Diabetes Information Clearinghouse states that:
- Each year, approximately 798,000 people are diagnosed with diabetes
- Diabetes is a leading cause of death and disability and costs $92 billion per year in direct medical costs.
- Heart Disease- in 2002, there were 23 million adults diagnosed with heart disease according to the Centers for Disease Control Summary Statistics for U.S. adults. The CDC also reports heart disease as the number one cause of death in the United States.
While these “big three” chronic health conditions are to some extent preventable and/or treatable, current health protocols can only do so much to address these problems.
Long term, the most effective way to control claims costs and keep insurance premiums down is to prevent claims from being incurred through health improvement.
The positive effects of a wellness initiative are cumulative. The longer the company participates, the greater the impact you should see. Taking action now could help stave off the development of future chronic conditions that will inevitably affect your bottom line and productivity in the future.
A handful of specialty wellness vendors have tracked specific ROI data results which support the positive financial impact on claims costs and productivity on a longer term basis. In the short term, the benefits of a wellness initiative include employee awareness, increased productivity, and higher morale.
There are many different levels for wellness initiatives or programs, and often they can be started at little or no cost to the employer. One of the most critical success factors for any new wellness program, not unlike other workplace initiatives, is executive level support and endorsement.
Following are some ideas to consider as you develop a Wellness Program:
- Implement Health Plan Design changes to promote healthier behavior like nonsmoker rates
- Create Health Plan Incentives like smoking cessation, prenatal care , child wellness and physicals
- Establish a wellness committee
- Health assessments (paper or online)
- Fitness Contests
- Provide healthy snack options/nutritional standards at the workplace
- Lunch and Learn events with wellness vendors/non-profits
- Corporate discounts/arrangements with Fitness Facilities/Restaurants