Lose a few pounds, pocket a few dollars.
That’s the approach a growing number of Colorado employers are taking to improve the health of their workers. Dangling premium discounts, credits, rebates and even cold hard cash as tempting carrots, employers are enticing their staffs to quit smoking, shed weight, lower their blood pressure and achieve a slew of other positive health outcomes.
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Some employers, however, are using a stick on employees who engage in unhealthy activities. Wal-Mart is about to start charging smokers higher insurance premiums – as much as $2,000 a year. Veridian Credit Union, based in Waterloo, Iowa, announced to its more than 500 workers that they have a year to lose weight and quit smoking, or they face higher insurance rates in 2013.
“Money talks,” explained Lisa Fenton Free, executive director of Grand Junction-based Rocky Mountain Health Plans Foundation, about the approach employers are taking to improve employee health and reduce insurance costs.
Fenton Free said she had people sobbing in her office when they realized they weren’t getting their company discounts, which can add up to more than $800 a year.
Using premium discounts as a lure, over five years Rocky Mountain Health Plans reduced the number of workers with a medium to high risk for high blood pressure from 32 percent to 12 percent. Tobacco use among employees also dropped in half to 9 percent.
Donna Marshall, executive director of the Colorado Business Group on Health, said that about half of the large employers she represents provide some type of economic benefits for improving health.
Aon Hewitt, which provides human resources services, found 22 percent of 1,000 companies surveyed nationally expected to have health incentive programs in place by now, and that number is expected to rise to 64 percent by 2016.
Benefits consulting firm Towers Watson and the National Business Group on Health found even higher numbers, with 4 out of 5 companies surveyed planning to join the trend by 2013.
“It’s becoming more and more the norm,” said Ellen Rehmar, director of human resources at University of Colorado Hospital, which began offering rewards for healthy behavior and health improvements in July.
University Hospital employees receive a $120 premium discount for participating in a health assessment and biometric screening. Those who meet the program’s definition of being healthy receive an additional $7.50 per month.
“Employers are looking for a way to ultimately reduce costs,” said Jeff Sporkin, a market sales leader for AON Hewitt in Colorado. “The biggest issues when you look at claim costs are high blood pressure, high cholesterol and high blood sugar and those are things that can be impacted relatively quickly (through wellness efforts).”
Money was the nudge Executive Assistant Melissa Dunn needed to make some drastic health changes. She works for Nelnet, Inc., a student loan company, in its Aurora office. When Nelnet began offering a non-smoking benefit of roughly $20 a week, Dunn kicked the habit.
At the same time, Nelnet launched a wellness program offering employees points to participate in health-oriented competitions. The program motivated Dunn – who was once considered morbidly obese and suffered from high blood pressure and arthritis – to lose 130 pounds and qualify for an annual wellness incentive of $1,200.
"I now am in some of the best physical condition I have been in since my 30s,” said Dunn. “My primary physician even gave me a “high five” at my last check up!"
The incentives do have critics. The American Heart Association, American Cancer Society, and American Diabetes Association oppose the use of “financial incentives tied to premiums, deductibles or other coinsurance paid by employers.” The three organizations cite a lack of evidence showing that insurance incentives actually changed behavior and a fear that such programs could be used to discriminate against workers who are less healthy.
Experts say that corporate wellness programs produce a 3-to-1 return on investment. University Hospital has seen absenteeism drop and Rocky Mountain Health Plans has cut short-term disability and workers compensation costs. But both say it’s hard to prove cause and effect.
The Colorado Consumer Health Initiative opposed a state law passed in 2010 that allows carriers catering to individuals and small groups to offer discounts for participation in wellness programs.
The group’s executive director, Dede de Percin, worries that the financial incentives penalize some workers and don’t provide the support many employees need sustain healthy behavior.
“What we know works best and improves behavior is one-on-one work with trained professionals, and setting goals personalized for each individual," said de Percin. "But in our current situation, the employer doesn't have to do anything to court behavior change” beyond offering discounts.
However, most believe incentive-based health programs are here to stay.
Corporate wellness consultant Colleen Reilly, president of Total Well-Being in Aurora, said 60 percent of her clients are offering incentives just to participate in a screening or evaluation program. Another 20 percent are offering rewards for employees who achieve certain outcomes. One of Reilly’s clients requires employees to undergo health screenings to qualify for health benefits.
Sporkin, of Aon Hewitt, expects employers to offer larger incentives to reach more employees. That may include richer benefits or profit-sharing.
“You can’t do the same thing year after year and expect something different to happen,” Sporkin said.
