In December, the wellness industry got a holiday surprise when a court ruled in AARP v. Equal Employment Opportunity Commission that the EEOC was to rewrite its definition of “voluntary” so it’s closer to the dictionary definition.
Wellness programs historically have been deemed “voluntary” even if the penalty for an employee not participating meant he could pay as much as 70% of his health insurance premiums for choosing not to.
If you or your organization has designed a wellness program because you believe it is the right thing for your employees, keep up the good work. If you have designed a wellness program to improve their health and reduce your health-insurance expense, buckle up.
The most basic outcomes-based wellness programs involve employees and sometimes their spouses getting their blood drawn for medical tests. Based on the results, rewards or penalties are assigned to measures such as blood pressure, cholesterol, body mass index and use of tobacco or nicotine.
A sales pitch from an outcome-based wellness provider sounds something like this: “Our program is a three- to five-year strategy that will raise employee awareness about their health, identify gaps in care and assign a financial incentive to motivate them to take corrective action. This will cause employees to improve their health, which will reduce your claims expense. Did we mention that we can design the programs of penalties and rewards so that the higher employee contributions pay for the cost of our services and the screenings?”
How do you build a program that will pay for itself? Charge those employees who don’t participate 70% of their health insurance premium to gain nearly 100% participation. Use readily available population health data to design the goals and incentives to determine the penalty revenue.
Assuming you’re off and running with your program, here’s what you, as an employer, can expect. In the first year, significant savings because in essence you’ve forced your employees to fund a wellness program that is “voluntary.”
Employees will pay more for their health insurance either because they don’t participate or because their screenings come back with poor results (high blood pressure, high cholesterol, an excesive body mass index or they abuse tobacco or nicotine). Then they quickly realize that taking medication can produce “passing results,” that is, lower their blood pressure and cholesterol and thus eliminate or reduce their financial penalties.
This is the increased awareness and financial reward you were promised, right? Wrong! You’ve just increased use of your health plan and driven your employees into a health-care system that is the root cause of your rising insurance premiums.
The cost shift to employees produced by your outcomes-based wellness program will deliver a short-term savings the same way offering a health savings account instead of a preferred provider organization plan did years ago. However, once this savings is recouped and employees begin meeting more standards through medication, you must either increase the penalties and rewards or raise the health standards to achieve the same returns. All of this happens while your overall health insurance trend is likely increasing at the same or a greater rate than before the program began.
Using outcomes-based wellness to rein in your skyrocketing health insurance expense is like buying new floormats for your car when the engine breaks down. Oprah Winfrey, who has had access to every health expert and resource imaginable, has spent her life struggling to gain personal wellness. Payroll deductions are simply not going to produce the long-term behavior and lifestyle changes required of your workforce to affect your health-care costs.
Your health-insurance premiums continue to rise because all the health-care companies along the supply chain understand it better than you and your broker.
Carriers, providers — and even brokers — are watching the prices of their shares soar while you’re dealing with margin compression and bloated selling and general administrative expenses. Managing the health-care supply chain can redirect those profits back to your balance sheet and be done without sticking your employees with a needle every year.
Copyright 2018 The Business Journal, Youngstown, Ohio.
Published by The Business Journal, Youngstown, Ohio.
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