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Separate Surveys Report Rising Employer Health-Care Costs Are Driving Implementation of Wellness Programs
October 13, 2009
By William Ng
Recessionary pressures and rising corporate health-care costs are forcing U.S. employers to raise employee contributions and vet benefit eligibility more carefully but are also driving the adoption of corporate wellness programs in attempts to alleviate long-term costs.
In separate research findings announced on back-to-back days last week, Aon Consulting and Towers Perrin reported that employers plan greater use of health-risk assessments (HRAs) and biometric screenings and more promotion of physical activity and healthy eating. These are initial steps as part of wellness initiatives designed to improve workforce health and thus lower claims (also known as presenteeism) and costs. To entice employee participation in company on-site HRAs and biometric screenings, incentives such as gift cards and merchandise are being offered, according to Aon's "2009 Benefits & Talent Survey."
"Both the HRA and biometric screenings are important components," says Paul Berger, chief medical officer of Aon Consulting's Health & Benefits Practice. "HRAs provide employees with personalized feedback to help meet their health goals. Biometric screenings provide employers objective data and a better understanding of the health risks in their employee populations. As a result, they can develop the right wellness and disease management programs."
In Aon's survey of 1,313 employers, 52 percent of them have offered both HRAs and biometric screenings while 20 percent are planning to offer HRAs and 16 percent biometric screenings. Out of those organizations already offering health assessments and screenings, 41 percent of them give away gift cards or merchandise as incentives for participation. Meanwhile, 67 percent of those surveyed have promoted exercise/physical activity, with another 12 percent planning to start promotions in 2010.
However, employers are only scratching the surface when taking measures to reduce long-term medical costs for their workers, with just 13 percent tracking the indirect cost of employee absenteeism as a result of chronic medical conditions. Also, just 36 percent are tracking their workforce participation of corporate wellness/preventive activities, and 32 percent are tracking their disease-management programs. Still, 45 percent are tracking their direct expenditures, i.e., medical costs, related to treatment for chronic conditions.
"The majority of employers are still not tracking the indirect effect of chronic conditions: presenteeism and absenteeism," Berger says. "Once employers know the impact chronic conditions have on their employees' productivity, they can begin to make improvements to their programs to lower their health risk factors and build healthier, more productive workforces."
Shorter term, however, 46 percent of the 1,300-plus employers that responded to Aon have conducted benefit eligibility verification audits, which ensure only eligible employee dependents are covered, and 20 percent are planning to perform them in 2010. Such measures have saved these organizations 3 to 10 percent on health-care costs for their employees' dependents.
Corporate health-care costs are rising, and employers are planning to pass costs to employees to relieve some of the financial pressure, with 70 percent in the Aon survey expecting to increase employee contributions and 67 percent expecting to raise deductibles, co-pays, co-insurance, or out-of-pocket maximums.
In the separate survey conducted by Towers Perrin of 300 employers, called the "2010 Health Care Cost Survey," employee premium contributions will jump by 10 percent, or more than $200 more per person, in 2010, along with higher co-pays.
"For employees, the affordability challenges associated with this year's cost increases are even more acute," says Dave Guilmette, managing director of Towers Perrin's Health and Welfare practice. "Employees are feeling the impact more keenly given that these actions come at a time when wages are flat or declining, 401(k) balances and employer matches are down, and bonuses and profit sharing are being scaled back."
The organizations in Towers Perrin's survey, primarily Fortune 1000 firms, are expecting an aggregate 7 percent rise in medical benefit expenditures in 2010. The average annual per-employee spend is seen to surpass $10,000, with employers covering 78 percent of that spend.
The fiscal challenges are making companies adopt behavioral change initiatives, such as personalized communications on health matters with each employee and providing personal lifestyle coaches, in attempts to create healthier workers over the long run. They are thus tracking their employee health data (such as biometrics) more closely.
Nielsen Business Media
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