How Effective are Employee Wellness Programs on Group Health Insurance Coverage?
As a business owner, you may be looking to cut insurance costs without reducing the coverage you can offer employees. As one solution, you find out that employee wellness programs that promote non-smoking, more exercise and better dietary choices can help lower your group premiums.
However, research in recent years has shown that these programs, while seemingly beneficial on the surface, do not always reduce your bottom line. Before initiating a workplace wellness program, consider the following points.
- The Effect Isn’t Immediate
You have your employees wear fitness trackers, ban smoke breaks outside and even schedule voluntary weigh-ins with your staff, but data shows that, even with rising health insurance costs, the effects aren’t always immediate. Statistics show that 75 percent of workers like when their employer offers these initiatives and 60 percent of companies have such a program in place, but a business may not see savings until two years after a program is implemented, according to a study by Population Health Alliance (PHA) and the Health Enhancement Research Organization (HERO).
- Not All Programs Are Equal
While the typical workplace wellness program encourages healthy lifestyle habits, multiple studies have shown that these are actually the least effective. For instance, a 2013 report from RAND Corp. found that programs focused on helping employees manage chronic conditions – being overweight or diabetic, having high blood pressure and living with depression – have the greatest effect on both at-risk individuals and on the amount a business spends on insurance.
Why is this the case? Data from the study indicated that disease management accounts for 86 percent of health care cost savings. In fact, for these workers, more focus on their health reduced health care costs by $136 per individual and resulted in 30-percent fewer hospitalizations.
- Employees Need to Stick With Better Habits
One problem with workplace wellness is that you’re dependent on your workers to make long-term lifestyle changes. Studies find that, with corporate weight loss initiatives, workers often binge before arriving at the office, then temporarily crash-diet to lose a few pounds.
- Discrimination
What happens when you look at individual employees’ premiums and single out those suitable for your wellness initiatives? Companies could have a discrimination lawsuit on their hands, as the employees typically targeted tend to be older or low-income. Instead, consider your effort collective, rather than an attempt to get your costliest workers down to a lower insurance tier.
- Discounts Based on Employee Participation
In 2016, the Equal Employment Opportunity Commission (EEOC) instituted new rules for employee wellness programs, including the option to offer premium discounts if workers and their spouses answer questions concerning their health or have a physical exam performed. In effect as of 2017, these rules let you offer up to a 30-percent discount per person for self-only coverage.
Considering a workplace wellness program for your company, but are unsure about the effect it could have on your insurance rates? Give us a call at 203.439.2815 to discuss the potential pros and cons.
