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Smart Benefits: Is Employer-Sponsored Wellness Here To Stay?

Monday, October 08, 2012

 

With employers possibly dropping health insurance benefits in 2014, what will happen to wellness programs?

According to the 2012 United Benefit Advisors survey, an increasing number of employers are offering workplace wellness programs. But will that hold true as the number of employers who offer health insurance decreases?

Exchanges Expected to Reduce Employer-Sponsored Coverage

After the state Health Benefit Exchanges kick off in 2014, Deloitte expects one in ten employers to drop health insurance coverage for their employees, while McKinsey predicts 30% of employers will definitely or probably drop coverage. The reason?  Employers, trying to hold down costs, seem willing to accept the less costly fines for non-compliance than continue to fund their share of the coverage.

Wellness Poised to Remain Well with Employers…

So will employers still offer wellness programs to their employees even if they don’t offer health insurance coverage? To date, the answer appears to be yes.

Wellness programs often save employers money by improving employee health. Employee health is critical to an employer’s fiscal health. The results of a new employer study by the Integrated Benefits Institute (IBI) reveals that employers lose $576 billion a year because of employee poor health from lost productivity, absenteeism, increased workers compensation costs, disability payments, turnover and more.

…And Employees

While it’s clearly in an employer’s best interest to keep employees healthy – and working – wellness programs appeal to employees for an entirely different set of reasons.   

  • Wellness programs provide a support system with built-in social benefits that may not be available at home.
  • Prospective employees who previously took part in wellness are looking for the same benefit from future employers.
  • Self-preservation is hot, no matter the worker’s age. People want to take better care of themselves, and if employers make it easier to do so, even better. 

And with healthcare reform supporting wellness expansion – increasing incentives from 20% to 30%, and possibly even higher, starting in 2012 – greater participation and behavior change is expected from the financial rewards. 

The Market’s Responding

The PPACA legislation is paving the way for employers to have more flexibility with their wellness program. And the market is expanding with a range of new options. Insurance carriers are quickly introducing new products with wellness incentives, value-based plan designs and premium reductions that reward employees for participation and/or achieving standards –  mirroring wellness programs offered by third party vendors.  With wellness a $500 billion industry, it’s no wonder everyone wants a piece of it.

“Employers have embraced the idea of inviting their team to the table as financial and/or health partners in their organizational healthcare affordability agenda,” says Heather Provino, CEO of Provant Health Solutions, a national leader in workplace health promotion. “Wellness is going to go through a transition and become a core benefit that the workforce considers part of their compensation package. It will be important for retention, recruitment and the global competitiveness of the organization as a whole.”

Amy Gallagher has over 19 years of healthcare industry experience. As Vice President at Cornerstone Group, she advises large employers on long-term cost-containment strategies, consumer-driven solutions and results-driven wellness programs. Amy speaks regularly on a variety of healthcare-related topics, is a member of local organizations like the Rhode Island Business Group on Health, HRM-RI, SHRM, WELCOA, and the Rhode Island Business Healthcare Advisory Council, and participates in the Lieutenant Governor’s Health Benefits Exchange work group of the Health Care Reform Commission.

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