The Affordable Care Act aside, one of the hottest topics for employers has been work-site wellness. We spend a good deal of time with our clients and prospects discussing the various kinds of wellness approaches available to their employees.
There are many wellness programs available in the marketplace today. Some of these programs are very lean in nature, and some are very robust.
Here’s an analogy: A company indicating that it has a wellness program is like a farm family indicating they have a tractor. Just knowing that alone provides no indication of what size or level of work efficiency the tractor provides. One needs to probe a little deeper. For example, what if the family is farming 1,440 acres versus 160? It’s important to know what we need something to do to know if it’s the best fit.
Knowing what kind of outcome a company would like to see over time will help determine if they need a participatory plan or performance-based wellness plan.
One of the most impressive outcomes of performance-based wellness is its ability over time to help reduce the need for medical care. A simple explanation is this: People who are actually healthier will not need as much health care as those who are not. That is a main principle behind most wellness plans – performance plans simply create incentives for employees to strive to reach a healthier life.
In essence, these plans rely on biometric screening data to segment employees into categories of health risk. The healthiest employees will score with a low to moderate risk, while the less healthy will score at an elevated risk. Implementation of performance-based wellness plans are realized over a couple of years.
First, in year one, an employer needs to decide to offer its health plan with tiered levels of monthly premium costs for employees based upon their successful engagement with the wellness plan. This means employees who do participate and successfully complete biometric screenings will be allowed to enroll in the health plan for a lower overall cost than those who simply choose not to participate. Incentives in year one are provided based upon participation alone.
Second, for those who do participate and engage successfully, their biometric results will matter in year two. To continue to receive the lowest possible cost for their share of the health insurance premium, employees will need to participate and score successfully in an established range to receive the lower overall cost. Conversely, those who do not participate or who fail to meet established score ranges will pay more for the same plan.
Finally, participants who do not score successfully will be given future opportunities to improve that score, even if just slightly, to receive that lower monthly cost. However, those who choose to not participate will end up paying more for the same health plan.
Like any health-related topic, there are details difficult to address in an article of this length, and certainly the Affordable Care Act does have rules that govern plans like these, and unlike some of the other moving parts, it looks like those rules are going to stick.
For employers who are now into their third and fourth years with performance-based wellness plans, the results have been very impressive. Employees are healthier, using less medical care overall and, as a result, are helping to reduce the total cost of the health plan.
Businesses will want to be sure that their leadership team is having discussions focused on work-site wellness. For our clients, this has been an area of focus and positive results have followed.