The obesity epidemic in America is starting to hit home for many employees as their companies are charging them more in health premiums. The same is true for those employyes who smoke.
In addition to offering wellness programs as a carrot toward better health, employers are increasingly wielding the stick of higher health inaurance premiums as a means to "encourage" their employees to get healthier, by impacting their wallets. In recent years, a growing number of companies have been encouraging workers to voluntarily improve their health to control escalating insurance costs. And while workers mostly like to see an employer offer smoking cessation classes and weight loss programs, too few are signing up or showing signs of improvement.
So now more employers are trying a different strategy, according to the Insurance Journal. They’re replacing or adding to the incentive of wellness programs, fitness center discounts, etc with a stick in the form of increased costs for worker's premiums. For example, discount store giant Wal-Mart says that starting in 2012 it will charge tobacco users higher premiums but also offer free smoking cessation programs.
Why are Employers Starting to Act
Tobacco users consume about 25 percent more healthcare services than non-tobacco users, says Greg Rossiter, a spokesman for Wal-Mart, which insures more than 1 million people, including family members. “The decisions aren’t easy, but we need to balance costs and provide quality coverage.”
For decades, workers – especially with large employers – have taken many health benefits for granted and until the past few years hardly noticed the price increases which does not offere a great employee incentive to efficiently use health care services.
But the increased premiums and cost-shares could impact employee morale and also could impact the lowest-wage earners the hardest eating up a bigger chunk of their dispopsable incomes. This can be especially difficult because access to gym memberships, greater nutrition, and other healthy resources are often limited for lower income individuals.
“Overall, the use of penalties is expected to climb in 2012 to almost 40 percent of large and mid-sized companies, up from 19 percent this year and only 8 percent in 2009, according to an October survey by consulting firm Towers Watson and the National Business Group on Health as reported by the Insurance Journal. The penalties include higher premiums and deductibles for individuals who failed to participate in health management activities as well as those who engaged in risky health behaviors such as smoking.
The weak economy is contributing to the change. Employers face higher health care costs – in part – because they’re hiring fewer younger healthy workers and losing fewer more sickly senior employees. The poor job market also means employers don’t have to be as generous with these benefits to compete. They now expect workers to contribute to the solution just as they would to a 401(k) retirement plan, says Jim Winkler, a managing principal at consulting firm Aon Hewitt’s health and benefits practice. ”You’re going to face consequences based on whether you’ve achieved or not,” he says.
So employers are turning to disease managment and behaviro incentive programs like the following:
Smoking Cessation Incentives
The incentive is an all-paid program to help tobacco users quit smoking and provide all smoking replacement materials. Most plans only cover this twice in a specified period of time because individuals often make several failed attempts and some never successfully quit.
Diabetes Treatment Incentives
An incentive program that is becoming more popular is awarding diabetics and pre-diabetics for independently taking medically proven steps to control their diabetes. The steps that earn the incentive are things such as regularly checking blood sugar levels, routine medical examines, and preventive screenings. An incentive that can be included is free diabetic supplies and a discount on co-payments for doctor visits relating to their condition. This aides better management of the condition with routine follow-up and limits more expensive care.
>Weight Management Incentives
Obesity is the largest healthcare cost of today's society. More and more insurance providers are finding ways to combat it by giving incentives to those who enroll and participate in weight management programs. Some insurance providers are even recognizing that obesity has a mental side to it by offering counseling at a discount.
And those that don’t are more likely to be punished. An Aon Hewitt survey released in June found that almost half of employers expect by 2016 to have programs that penalize workers ”for not achieving specific health outcomes” such as lowering their weight, up from 10 percent in 2011