Why you can’t afford not to offer health benefits

Originally posted January 14, 2014 by Larry Boress on https://ebn.benefitnews.com

The debate continues on the future of employer-based health benefits as employers continue to be challenged by the economy, the health care delivery system and changes resulting from the Affordable Care Act. There are some who believe this is the beginning of the end for employer-based health care benefits. I’m not one of them.

Why are employers still offering health care benefits and increasing worksite wellness activities? It’s not rocket science. Employers don’t offer benefits because they are altruistic. They do so primarily to recruit and retain talent and to ensure workers have the mental and physical capacity to perform their best on the job.

With benefits being the second highest expense after payroll, and the foreboding 2018 excise (“Cadillac“) tax on benefits above a certain dollar level, there is a great need for employers to reduce their outlay for medical expenses. Businesses are addressing this in multiple ways, including increasing programs to identify disease and health problems early in their progress and to reduce the risks for those with chronic conditions.

Employers have increased deductibles and co-pays of their health benefit programs, with close to 30% now offering only health savings accounts and health reimbursement accounts. In a new development, according the Private Exchange Evaluation Collaborative, close to half of all employers will be considering using private health insurance exchanges to offload their benefit administrative costs, while still offering benefits to their employees.

Increasingly, we also find employers are taking a deeper dive into providing direct health programs and services to their covered populations to respond to a health system that fails to offer easy access, effectively focus on prevention or management of chronic conditions and one that doesn’t incentivize individuals to take responsibility for own their health.

The nonprofit National Association of Worksite Health Centers found that close to a third of employers today make medical services available onsite so they are easily accessible to their employees. This allows them to reduce costs while minimizing lost work time due to absenteeism

The existence or even the unlikely repeal of the ACA does not change the value of offering benefits for employers. When you look at Europe, where many countries do not offer health benefits to their citizens, you still find companies offering wellness and preventive services to keep people safe, healthy and productive.

In surveys conducted by the Midwest Business Group on Health, the vast majority of employers agree that there is a link between an employee’s health and their productivity. They believe that health benefits are a necessary cost of doing business and view health benefits as an investment in human capital with measurable outcomes, not just an expense against the bottom line.

If employers are to remain attractive to new talent and retain their existing human capital, they will need to continue to offer health benefits to their workforces. But to do so, businesses must develop comprehensive, integrated strategies that reduce their costs and make employees more responsible for decisions they make about their medical care.

Many employers have already begun to move in this direction by increasing use of outcome-based incentives to motivate lifestyle choices, encouraging use of preventive care, and paying only for high quality providers and high-value, cost-effective treatments and services.

At the end of the day, dropping health care coverage is not an option, especially for employers who are focused on the health and productivity of their workforce. An employer-based system can and should continue if we recognize the value of our human capital being as important as the technology, machinery and plants that develop our products. Regardless of a company’s size, in a global marketplace, a business can’t afford to lose its most important assets – its people.


Let’s Go Wellness

Most business leaders (87 percent) see value in worksite wellness programs, according to a recent online survey of HR leaders. Seventy-four percent of polled executives said they would be open to sharing ideas with other business leaders in their community to come up with unique and effective wellness initiatives, the report said.

Workforce Obesity: What Can You Do?

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What can you do to help workers maintain a healthy weight and keep your bottom line healthy at the same time? Read about a company that's helping its workers lose tons of weight.


Employees of Health Care Services Corporation (HCSC) lost more than 53,000 pounds last year. HCSC is the owner and operator of Blue Cross Blue Shield of Illinois, Texas, Oklahoma, and New Mexico.

According to Senior Vice President Dr. Paul Handel, that amount tops the company’s 20-ton weight-loss goal. A robust wellness program including fitness centers, classes, and healthy cafeteria food are part of the solution.

"Many employers have viewed wellness programs as a nice extra when times are flush," says Handel. "We believe that the obesity epidemic and the rising toll of diabetes now make them a strategic imperative."

Financial incentives are an important part of the HCSC strategy. In addition to tying wellness to annual bonuses, the company offers employees additional incentives of up to $200 a year for taking an annual wellness exam and logging their physical activity.

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Other Strategies

The key to achieving and maintaining a healthy weight, says the Center for Disease Control and Prevention (CDC), isn't about short-term dietary changes. It's about a lifestyle that includes:

·         Healthy eating;

·         Regular physical activity; and

·         Balancing the number of calories consumed with the number of calories the body uses.

According to CDC the first step in maintaining a healthy weight is to look at the current situation. Body Mass Index (BMI) is one way to measure weight. BMI calculations are based on height and weight:

·         A BMI of 18.5 signifies being underweight.

·         The range between 18.5 and 24.4 is considered to be a normal weight.

·         The range between 24.5 and 29.9 is considered to be overweight.

·         A BMI between 30 and 40 is considered to be obese.

·         BMI of 40 and greater is considered to be morbid or extreme obesity.

Your employees can calculate their BMI by going to

CDC's website

Want to Win the Wellness Game? Start with Good Communications and Fun

For many employers, wellness has become a no-brainer. The challenge, many employers discover, is getting employees on board and keeping them on the right track.

The solution, experts say, is to keep employees informed and keep it fun.

"The goal of wellness workplace programs is to improve health and slow health care costs," said Amy Gallagher, wellness expert with Cornerstone Group in Warwick, R.I. "And to get there, a clear communication strategy is a must."

Gallagher noted in a recent blog post on GoLocalProv that employers need to be aggressive and proactive when promoting their programs.

"Don't be shy when rolling out a wellness program; make it an event," Gallagher wrote. "In a kick-off meeting, position the program as an employee benefit the employer fully supports and be sure to involve leadership."

Gallagher also suggested discussing the importance of wellness with employees and clearly defining the activities and expectations.

Once the program is rolling, employers should consistently remind employees of the initiative and provide online portals and tools to boost participation.

Like any activity, it's more fun when it's a game. And wellness is no exception, according Limeade Inc.'s Henry Albrect in a recent Society for Human Resource Management report.

In the article, Albrect noted that while employers may want to be aggressive with their programs, securing buy-in from employees and making participation voluntary will generate better results.

"Traditional wellness programs often fail to achieve lasting change using a heavy-handed reliance on high incentives to drive goals passed down by the company," Albrect wrote. Programs that rely on games that appear to serve the participants' interests -- not the company's -- tend to fare better, he noted. Also, social games -- contests that involve people with whom workers already interact and know -- can be particularly effective, he said.

Like any game, the players -- not just the employer -- will want to know the score, wrote Gallagher of Cornerstone, a Member Firm of United Benefit Advisors.

"After a cycle of activities is completed, be sure to report back to employees on progress and results. Share where the population health risks are, how future activities and participation will help reduce them and any new program goals or offerings. Don't forget to survey employees to gauge their satisfaction with the program -- perhaps the most important result of all."