Employers Take Another Look at CDHPs
While consumer-driven health plans (CDHPs) have been shown in the past to generate savings for employers and workers alike, the CDHP movement now might be losing some steam, according to a pair of industry studies.
CDHPs -- high-deductible health plans (HDHPs) often paired with health savings accounts -- made up 22.5 percent of all health care plans offered in the U.S. in 2012, according to the latest release from the UBA Health Plan Survey. That figure compares with 22.9 percent in 2011 -- the first decline since 2007.
There's no shortage of research that points to the positives of these types of plans. A recent study by the Kaiser Family Foundation found that HDHPs had average premiums of just under $5,000 for single coverage in 2012 -- about 15 percent less than preferred provider organization (PPO) plans, according to a report in MarketWatch. Another report by the RAND Corp. noted that patients with CDHPs tended to see significantly lower overall medical costs and used fewer brand-name drugs.
Statistics like those -- and a challenging economic outlook -- have moved more employers to offer CDHPs, said Helen Darling, president of the National Business Group on Health, in the MarketWatch report.
"Now that there's been this economic crunch and wages are flat, the increased costs of health care are harder to take," Darling said.
Yet at the same time, employers are starting to see some downsides to consumer-based care, the RAND study notes. Patients with chronic conditions often see much higher out-of-pocket expenses than those without a chronic disease. The plans also may discourage employees from obtaining medical care, which can lead to bigger costs down the road.
"The concern is that [those enrolled in CDHPs are] forgoing care that they need," said Amelia M. Haviland of the Carnegie Mellon University and co-author of the RAND study in MarketWatch.
CDHPs also aren't achieving as much first-year savings for some employers. The 2012 UBA Health Plan Survey found that the savings created by CDHPs in their first year over the plans they were replacing averaged 1.75 percent in 2012, a significant reduction from prior years.
Still, the survey spotted a few bright spots for these types of plans. The negative trend of CDHPs renewing at higher rates compared with other plans did not repeat in 2012, and CDHPs continue to remain popular in particular regions of the U.S. -- especially in the Northeast, where 27.8 percent of all plans were CDHPs.
Value of Employee Communication Sessions
By Jay Delahousay, Demand Media
Source: https://smallbusiness.chron.com
Despite the many ways to pass information in the workplace -- email, social media, phone, text or via the company intranet -- inadequate communication between managers and employees exists. Employees need guidance from their supervisors, and management needs input from the entire team in order for the company to succeed. To help foster an open and honest culture, many companies host communication sessions that can provide measurable benefits to all employees.
Definition
An employee communication session is a give-and-take opportunity where employees can air their concerns and where management can share what's happening in the company. Hewlett Packard, for example, holds upward of 22 communication sessions with more than 10,000 employees in attendance at sites around the world. Many companies also encourage employees to complete surveys to voice their concerns regarding management or the company in general.
Facilitates Dialogue
When a company is multifaceted, one department might not be aware of the strategic goals of another part of the business, -- or information trickles upward, but not downward. Companies such as Flextronics and Emerson Process Management use employee communication sessions. These scheduled meetings positively reinforce the objectives between management and employees, according to Alan Miu, managing director of TNT Express Worldwide. When an employee can communicate with management at its highest levels, it improves the transparency and openness in employee dialogue.
Inspires Involvement and Loyalty
Employee communications programs help give the employees the perception that they are greatly involved in the company's objectives and goals. A 2001 study by the Hay Group revealed that employees who are engaged in the direction and decisions of the organization are more productive and will stay with the company longer. The employee communication session tells the employee at all levels: "You and your opinion matters to us." When employees take this message to heart, they tend to feel more inspired and are motivated to support company goals, according to a 2008 study published in the journal of the Public Relations Society of America.
Builds Trusting Relationships
Employee communication programs can be a tool to build a trust level that encourages employees to speak freely about their work, according to Evan Reineking of HR Tools.com. When an employee feels heard and is kept well-informed, he feels respected by his employer. While a company might not be able to disclose all the details about management decisions, keeping employees in the loop with accurate and complete information makes them more likely to trust what is shared.
Minimizes Gossip
Gossip is prevalent in many workplaces, especially where communication is nonexistent and where employees are left to speculate about conditions or the company's health. When employees don't receive necessary details from their supervisors, rumors are likely to be spread, which can damage morale and cause uncertainty among employees, according to Robert Hosking, executive director of OfficeTeam. Keeping employees abreast of the current climate in the workplace can alleviate the need to speculate.
One-Third Of U.S. Women Have Not Completed Basic Retirement Planning
Source: Insurance Broadcasting
Despite being more concerned about the potential risks they face in retirement than men, a new study by LIMRA found that fewer women had completed any of the basic retirement planning activities (determining expenses and income, calculating assets, etc.). Thirty-two percent of women said they had done no retirement planning. (chart)
"We know from earlier studies that working women, on average, have accumulated 40 percent less than men for retirement, which was confirmed again in this study," said Cecilia Shiner, senior analyst, LIMRA retirement research. "Even though 6 in 10 women are concerned they aren't saving enough to last throughout their retirement, we see few women taking steps to mitigate for this risk."
LIMRA found that women were less engaged in retirement and investment activities - only a third of women said they were actively involved in monitoring and managing their retirement savings, compared with nearly half of men (46 percent). Two-thirds of women were not confident that they would be able to live their chosen retirement lifestyle, yet only 26 percent of women spend time investigating financial products that could help them.
"The knowledge gap between men and women continues to be an issue - just 33 percent of women felt they were knowledgeable about financial products and services, compared with 55 percent of men," noted Shiner. "Our research shows that when consumers feel more knowledgeable about financial products, they are more likely to be engaged. Advisors and companies should be developing new strategies to educate women and increase their engagement level."
Looking at women who said they were knowledgeable about financial products and services, nearly twice as many (60%) were actively involved in monitoring and managing their retirement savings, and more than half of these women were confident that they would be able to achieve the retirement lifestyle they want.
"Engaging and educating women should be a top priority of our industry," said Alison Salka, LIMRA corporate vice president and director of Retirement Research."There are approximately 16.6 million women within 10 years of retirement (age 55 to 70 and not yet retired). Our research reveals that many of them are financially unprepared for retirement and because of their lack of knowledge and understanding of our products and services, are not taking the steps to reduce the risk that they run out of money in retirement."
LIMRA, a worldwide research, consulting and professional development organization, is the trusted source of industry knowledge, helping more than 850 insurance and financial services companies in 73 countries increase their marketing and distribution effectiveness. Visit LIMRA at www.limra.com.
Catherine Theroux | Director | Public Relations | LIMRA | 300 Day Hill Road | Windsor, CT 06095
Summary of Benefits and Coverage could wreak communication havoc
Source: eba.benefitnews.com
by Ed Bray
In a meeting talking about the upcoming healthcare reform requirements and it was time to present the Summary of Benefits and Coverage document, which will need to be distributed in the next few months. As part of my show-and-tell, I passed around the sample SBC that the Department of Labor posted on its website. The first reaction was, “This looks like the information you receive with a credit card approval letter [that no one reads].” As the ever-professional, I simply said, “yes, it’s pretty detailed” but on the inside I was saying something more like, “wasn’t the intent of this to make the communication of medical insurance coverage easier?”
Have you seen your SBC yet? Here is the sample provided by the Department of Labor: https://www.dol.gov/ebsa/pdf/SBCSampleCompleted.pdf.
I’ll leave the judging to you but just a few comments about the SBC (or what the federal government refers to as the “easy-to-understand summary about a health plan’s benefits and coverage.”)
- The SBC may not exceed four pages in length. Convincing employees to read four pages wouldn’t be so bad, right? But the regulations from February 12, 2012 contain two extra words that make a huge difference: “cannot exceed four double-sided pages.” (emphasis my own.) Eight pages of medical benefits stuff! Call in the employee engagement police! And just for kicks, the word count in the sample SBC is 2,671 words.
- If you provide an annual health & welfare insurance benefits guide to employees (typically around open enrollment), you will most likely have your work cut out for you. Here’s why. There’s a good chance you include information about the company’s medical insurance plan options in that guide. So, will you continue to create that guide as is and offer the SBC along with it (causing employees to wonder why they are receiving two different sources of medical insurance information) or will you remove the medical insurance information from the guide and provide the SBC along with it (causing employees to wonder where the medical insurance information went and then why the medical insurance information in the SBC looks different than the rest of the health insurance information in the benefits guide) or something else? Any way you look at it, there is a good chance for some level of confusion when distributing the SBC in a population used to receiving a comprehensive health & welfare insurance benefits guide.
- If you haven’t checked the list on this website published by The Center for Insurance Information & Insurance Oversight —https://cciio.cms.gov/resources/factsheets/clas-data.html — you may want to, especially if you are developing your own SBCs. Section 2719 of the Public Health Service Act requires group health plans and health insurance issuers offering health insurance coverage to provide the SBC in a “culturally and linguistically appropriate manner.” Thus, if you operate in a county in which 10% or more of the population is literate in only the same non-English language, English versions of the SBCs must include a prominently displayed statement in the applicable non-English language indicating how to access the language services provided by the plan or issuer. Upon request, a written translation in the non-English language of applicable notices must be provided. The list on the website includes all of the counties which currently meet or exceed the 10% threshold. This list will be updated annually.
What is the real cost of free women’s health care?
By Marli D. Riggs
https://ebn.benefitnews.com
Although eight new prevention-related health care services for women included in the Patient Protection and Affordable Care Act are now available at no cost to female patients, many are left wondering about the real price tag.
Tanya Boyd, owner of Sunnyvale, Texas-based Tanya Boyd & Associates, believes the Department of Health and Human Services and the Obama administration should not tout the word “free” when talking about health care coverage. “It is completely misleading,” she says.
Free is more of a fallacy and should be replaced with the more appropriate word “covered,” when talking about health care services covered for women, adds Reid Rasmussen, owner of McKinney, Texas-based Benefit Brainstorm. “While many call these ‘free’ services, there is still a cost that’s being shared by Americans who are buying insurance,” he says.
As of Aug.1, the new rules in the health care law requiring coverage of these services take effect at most health insurance plans’ next renewal date.
The services are expected to cover 47 million women, and the total number of prevention-related health care services for women climbs to 22, rising from 14 that became effective in September 2010, according to the federal government. The eight new prevention-related services are based on recommendations from the Institute of Medicine, which polled independent physicians, nurses, scientists and other experts, as well as evidence-based research, to develop its recommendations.
Non-grandfathered group health plans offering group or individual health insurance coverage must provide coverage for preventive care without any cost-sharing requirements such as copayments, coinsurance or deductibles, as long as services are administered by physicians and other health care professionals who participate in the plan’s network.
Group health plans and issuers that have maintained grandfathered status are not required to cover these preventive services. In addition, certain nonprofit religious organizations, such as churches and schools, are also not required to cover these services.
Boyd claims that the services were already readily available to women who needed and wanted them. “Many women who put health care at the top of their priority list have always had the services done, whether they paid a copay, found a clinic that provided services for free, or paid 100% out of their pocket,” Boyd says. “Now insurance companies are forced to pay for these services, which will be reflected in the premiums we all pay.”
Putting it bluntly, Boyd says: “All of this ‘free’ stuff is going to be very expensive.”
Balancing Benefits Communication
Source: https://www.hreonline.com
By Mark McGraw
Recent research shows a majority of companies struggle with communicating benefits information to employees on a year-round basis. Experts urge HR leaders to incorporate the technology and tools at their disposal to make communication strategies more successful, and to document their efforts to ensure consistency.
HR professionals know that a healthy workforce generally equates to a more productive workforce. And, HR professionals know they need to consistently encourage healthy behaviors among employees. Actually driving this important message home on a regular basis, however, seems easier said than done.
A recent Benz Communication survey of 298 benefits professionals finds less than one-third of employers communicating with employees throughout the year about benefits program information, despite nearly 80 percent of respondents citing "getting employees engaged year-round" as one of their biggest challenges.
Economics and antiquated approaches are two of the biggest culprits behind breakdowns in benefits communication, says Jennifer Benz, founder and CEO of Benz Communications, headquartered in San Francisco.
"Part of the issue is bandwidth and capacity. Benefits teams have been trimmed back while their responsibilities get bigger and bigger," she says. "You have large organizations with small teams responsible for all aspects of benefits -- regulatory, compliance and communication.
"You also have a lot of companies still using old tools that make it expensive and more difficult to manage communication," Benz continues. "This kind of connects to the bandwidth issue, and makes communicating year-round impossible. But if organizations transition to new tools like social media, blogs and websites, they could better manage ongoing communication."
For example, many organizations still rely on print newsletters and/or brochures to relay benefits-related information to employees, she says. "Some companies still feel that individuals can't rely on online channels if they don't have computer access during the day. But that's just not true. Print newsletters are expensive and take time to put together. And, the same can be said of brochures and employee meetings as well. Trying to orchestrate them takes a lot of time. These channels are viable, and can be used to complement more modern methods, but they require a lot more resources."
Creating a website outside the company's firewall that includes video and other multimedia resources is just one relatively simple example of how embracing technology can aid benefits communication, Benz continues.
"These tools just make the message easier to understand and more accessible. Benefits managers have been focusing on communication, but there's still a big gap between the way benefits communication works and the rest of the world communicates."
But, however successful your efforts in getting employees to read benefits materials -- in print and/or online ? may be the challenge of getting employees engaged in health benefits programs remains, says Helen Darling, president and CEO of the Washington-based National Business Group on Health.
"People have always done very little related to their benefits until a problem arises or when they are required to actively enroll in plans," says Darling. "Inertia tends to be one of the most powerful forces in health benefits."
To spur employees into action, employers "have to do a number of things," she says, "such as . . . paying employees through reduced premiums or money into accounts to encourage engagement.
"And, more effective, targeted and clever communication can help ensure more success. HR can evaluate what they've done in the past, segment their populations, target communications to them, use diverse approaches and track which methods and messages are most effective."
The study does suggest some movement on this front, with 56 percent of participants reporting the effectiveness of their benefits-communication efforts has improved during the last three years.
"While it may not always feel like it, we're at a very exciting time for HR and benefits communication," says Jim Hoff, principal at Aon Hewitt's communication practice in Chicago.
"The role of effective communication is more important than ever, as organizations need to get their people healthy and productive, and need to show an increasing return on the investments they're making in people and benefits programs," says Hoff. "Plus, there are more and better tools and tactics at our disposal to truly market benefits programs and drive new behaviors."
Despite making strides, however, nearly half (45 percent) of survey respondents indicate they still aren't satisfied with their current communication strategies, with another 28 percent describing themselves as "ambivalent" about their approach.
First and foremost, successful benefits-communication strategies should be comprehensive, and not just a calendar of benefits-related activities, says Hoff.
"HR leaders and benefits communicators can ask questions like, 'What are the goals of the business and HR overall, and how can communication efforts drive behaviors that will achieve those goals? How can we best segment and target our audience to ensure we're delivering the right messages to the right people via the right channel at the right time? And how can we best use the channels and technologies available in a multichannel approach -- traditional web and email, mobile sites, text messaging and very targeted use of print?' "
Beyond using the technology and tools at HR's disposal, communication plans should start with understanding the three-to-five year strategic priorities of the business -- healthcare cost management, growth by acquisition, improving productivity and customer service, and attracting and retaining talent, for example, says Hoff.
"Associated with each of these priorities are one- to two-year HR outcomes," he continues, "with a focus on measurable return and a few outcomes that are aggressive but achievable. From there, a communication strategy can be tied to those outcomes.
Within each of these focus areas, the strategy should address the key messages for each critical audience as well as stakeholders and opinion leaders within the organization, says Hoff. An effective approach should also include what he describes as a "multi-channel blend of push and pull communication, so that busy employees get the information -- and motivation -- they need while having access to additional information when they want it. And, on top of all this should be a relentless focus on making it easy and relevant."
The entire strategy should be documented as well, in order to track and measure consistency and progress throughout the year, adds Benz.
"Without having some sort of documented strategy, you can't tell if what you're doing is effective," she says. "I think HR leaders can make this a priority within their organizations, and can elevate the role of benefits to something that's critical to business, rather than just being thought of as a necessary administrative function."
Hiring rises while employee engagement falls
Source: https://www.benefitspro.com
Although employers are hiring more workers, employee engagement is down, according to Mercer’s 2012 Attraction and Retention Survey.
In fact, more than 40 percent of respondents report that they are bringing in more employees in 2012 as opposed to 27 percent in 2010, and 16 percent of respondents are cutting staff compared to 25 percent in 2010. Still, 24 percent of respondents say they are seeing lower levels of employee engagements, a jump from 13 percent in 2010.
“Employee loyalty has been eroding the past few years due to companies’ responses to the economic downturn,” says Loree Griffith, principal with Mercer’s rewards consulting business. “Actions like layoffs, pay freezes and limited training opportunities have created an evolving employment deal for employees due to uncertainty about what is expected and how employees will be rewarded. Meanwhile, firms are still aggressively managing people costs while finding ways to re-energize and re-motivate engaged employees.”
Turnover is a major contributor to the attention employers are giving employee engagement as nearly 60 percent of respondents expect to see higher voluntary turnover with the job market and economy improving. Certain jobs are in higher demand than others because of skills shortages and market demand. Among these positions are information technology, research and development and scientific engineering, and executive level and top management.
“Employees with the ‘right’ skill sets are in demand,” says Griffith. “Despite the increase in hiring, many firms are experiencing talent shortages due to critical gaps between skills employees possess and skills businesses need. Now more than ever, firms need to engage and develop their high-potential employees and critical work force segments.”
Both cash and noncash rewards remain an important part in strengthening employee engagement and retention, and this is especially true as many employers are cutting base pay increases and offering smaller bonuses, the survey finds. Merit increases are particularly popular as 95 percent of respondents providing some form of increase for 2012.
Of the noncash reward programs implemented by organizations over the past 18 months, are communicating total reward value to employees at 25 percent, use of social media to boost the employee work experience at 25 percent, formalized career paths at 22 percent, internal and external training at 22 percent and special recognition at 22 percent. These responses are similar to those from 2010, although more respondents are relying on social media and team building.
Despite the higher use of noncash rewards, respondents expect the top rewards that drive employee engagement and retention in 2012 to be base pay increases at 50 percent, vertical career progression at 47 percent and leadership development at 46 percent. Rewards that are expected to have a moderate impact on employee engagement and retention are variable pay, health care benefits, work-life programs, performance management, time-off programs and training.
“While noncash programs, like work-life initiatives and formal career paths, are important for employee engagement all the time, employers must revisit pay in light of the changing business environment to stay competitive, retain their top-performing employees and ultimately buy or build required skills for the future,” says Jeanie Adkins, partner and segment co-leader of Mercer’s rewards consulting business.
IRS Raises 401(k) Contribution Limit
On Thursday October 18, 2012 the Internal Revenue Service(IRS) announced that effective January 1, 2013 employees will be able to contribute an additional $500 a year into their 401(k)s, tax free.
The tax-free contribution limit for retirement plans will increase to $17,500 for 2013, up from $17,000 this year. This will be the second in a row that the IRS has increased the limit by $500 as a result of the rising inflation rate.
The catch-up contribution limit-the additional amount of tax-free money employees over 50 are allowed to contribute to their retirement plan- remains unchanged at $5,500 on top of the initial $17,500.
Limits for Defined Contribution Plans
Individual Limitation-
The limit on contributions made on behalf of an individual to a defined contribution plan will be increased from $50,000 to $51,000. Application of this limit will remain the lesser of 100% of pay or $51,000.
401(k) Deferrals-
The dollar limitation on employee deferrals in 401(k) plans is increased from $17,000 to $17,500. 401(k) limits are based on the calendar year regardless of plan year end.
Catch-Up Contributions-
Catch-up contribution for participants 50 years or older remains unchanged at $5,500. This is also a calendar year limit regardless of plan the year end.
Defined Benefit Plan Limits-
Effective January 1, 2013, the limitation on the annual benefit under a defined benefit plan under section 415(b)(1)(A) is increased from $200,0000 to $205,000.
Annual Compensation Limits-
The annual compensation limit under Sections 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) is increased from $250,000 to $255,000.
Key Employees-
The dollar limitation under Section 416(i)(1)(A)(i) concerning the definition of a key employee in a top-heavy plan remains at $165,000.
Highly Compensated Employees-
The limitation used in the definition of highly compensated employee under Section 414(q)(1)(B) remains at $115,000.
The impact of this is that employees who earn in excess of $115,000 in the plan year that begins in 2012 will be considered highly compensated for the plan year beginning in 2013 and an employee who earns in excess of $115,000 in 2013 will be considered highly compensated employees in 2014.
These limits are applicable to calendar year plans.
A prescription for healthier retirement savings through wellness
Source: https://www.benefitspro.com
BY TIM MINARD
For years, most people looked at their physical health and their financial situation as two very different issues. But that’s changing. Today, the overwhelming majority of American workers recognize the link between health and wealth. Our recent survey found 84 percent of workers see physical health as an investment in their financial future.
Employers are also beginning to see employee wellness as an investment in the financial condition of the business. Healthier employees can lead to a healthier bottom line due to increased productivity, decreased absenteeism and—most significantly—reduced healthcare costs for the business.
There is another side benefit from wellness in the workplace that is gaining attention. Wellness programs may just be what the doctor ordered to boost retirement savings. Employees with fewer health problems logically would potentially have more money available to save for retirement. And down the road, healthier retirees could potentially spend less of their nest egg on medical expenses.
Because it is getting harder to separate health from ultimate wealth at the employer and employee level, discussions about benefits will likely focus more and more on the idea of total wellness. No matter what kind of benefits you sell, having a good understanding of the intersection between wellness benefits and retirement plans helps position you as being on the leading edge of this burgeoning trend.
Fortunately, the body of research proving the connection between physical and financial wellness and the positive impact on both employee and employer is growing.
Here’s a closer look at some compelling proof points that demonstrate the overall benefits of a total wellness approach:
Financial benefits to employees
- The short- and long-term costs of chronic diseases. Diabetes, for instance, has a known cost. The American Diabetes Association says for every dollar a healthy person spends on healthcare, a diabetic employee will spend $2.30. Obesity is also known to raise medical costs by 41 percent and boost prescription drug costs by 80 percent. In fact, the U.S. Centers for Disease Control says almost 10 percent of U.S. medical costs are attributed to obesity.
- Wellness programs reduce health risks. A brand new study conducted by Principal Wellness Company of 12,000 adults, found that participants in comprehensive workplace wellness programs achieve a significant reduction in health risks in as little as 18 months. For individuals participating in one-on-one health coaching, more than one in three (34 percent) moved from a high risk status to a lower risk category. This shift significantly decreases their likelihood to develop diabetes, heart attack or stroke. The percent of participants considered low-risk increased by more than 11 percent.
- How wellness can help employees free up funds for additional savings. By spending less on healthcare today, employees have more money to set aside for retirement. Take, for example, the case of someone who smokes 10 cigarettes a day. Using the calculator at www.smokefree.gov, if he quits and diverts what he had been spending on cigarettes ($5.73 a pack) to a retirement account, that savings would amount to an estimated $12,773 in additional retirement savings over the course of 10 years.
- Ways improved health can help to reduce healthcare expenses duringretirement. Those reduced costs can help make retirees’ savings last longer. That’s a huge benefit in light of the Employee Benefit Research Council’s estimate that a typical, moderately healthy retired couple will need to have saved over $250,000 just to address unreimbursed healthcare expenses (and premiums) throughout an average retirement.
Financial benefits to employers
- For every dollar an employer spends on a wellness program, its medical costs are improved by approximately $3.27 — and another $2.73 in savings is realized in lower absenteeism costs, according to the Health Management Research Center at the University of Michigan.
- Healthier employees can also lead to soft cost savings, such as higher-energy employees and increased levels of engagement in their jobs.
There is one other way that wellness programs can help retirement programs. The wellness folks have learned that when it comes to motivating participation, incentives work.
It’s not surprising that the number of employers offering wellness programs continues to increase. The Society for Human Resources reports that in 2012 just over 60 percent of American workers have access to wellness programs that also offer incentives if they participate.
A new white paper, Wellness = Retirement Savings, offers insights into how wellness programs and retirement plans can work together and can help you be prepared for the inevitable total wellness discussion.
Want wellness? Offer some motivation
Source: https://www.benefitspro.com
By their very definition, incentives serve as motivation to elicit specific actions.
When used by employers as part of a medical management program—particularly wellness and disease management—incentives are proven to significantly raise participation rates, leading to improved member health, increased productivity, reduced health care spending and, ultimately, positive returns on their investment.
The challenge is determining how to structure an incentive program to deliver the desired results.
Studies and our experience have shown that incentives of $50 per employee per month, or $600 per employee annually, yield participation levels of 75 percent or better when the member answers the call. In other words, with the right incentive, you can lead a horse to water, and you can expect him to drink, at least three-fourths of the time.
Successful medical management programs target high-risk plan members with medical conditions or lifestyle behaviors that drive costs for employers. When implementing an incentive program, however, it is wise to cast a wider net.
Although it might seem counterintuitive to offer incentives to employees who are already healthy, it’s important to engage the entire member population. Doing so deepens the pool from which you can identify candidates with chronic conditions or emerging lifestyle risks who would benefit from one-on-one coaching from a registered nurse or behavior-change specialist.
Remember, about 75 percent of those you engage will agree to participate. So if you are able to reach a larger percentage of the overall population, your participation rate will increase proportionately. Plus, even the healthiest of plan members can benefit from learning more about how the decisions they make can influence their personal health and well-being.
Consider a plan structure with a primary incentive that appeals to the total population, complemented by a secondary incentive used to target the at-risk population. Primary incentives often are distributed in the form of premium reductions or additional dollars applied to an employee’s paycheck, a health savings account or as part of a value-based benefit plan.
These incentives typically are used to motivate members to complete clinical health risk assessments and biometric health screenings, both of which help identify individuals for potential coaching intervention.
These at-risk or high-risk individuals are candidates for secondary incentives. They may have a chronic medical condition, such as diabetes, heart disease or asthma. They may have a higher likelihood of developing complications during pregnancy. Or they may have one or more lifestyle risks, such as obesity, tobacco use or a lack of physical activity.
Secondary incentives can encourage these members to work with a health coach toward managing their medical condition or making health sustainable changes to their behavior.
Their participation may be required in order to remain eligible for premium reductions, or they may receive secondary incentives in the form of gift cards or reduced or waived copayments or coinsurance for:
- Therapeutic class medications used to treat chronic diseases
- Diabetic supplies
- A newborn’s inpatient stay following delivery
- Nicotine replacement therapy gum or patches
- Weight loss or fitness club memberships
Our experience shows that, on average, more than 80 percent of those who enroll in coaching will complete the process, equipping them with healthy habits and techniques that are sustainable for a lifetime.
When combined with an effective medical management plan, the right incentives will help employers move employees’ personal wellness forward, move their corporate health culture forward, and reduce their plan costs long-term.