BenefitsPro.com has posted an item forecasting four employer wellness trends for 2013 featuring Stephanie Pronk of Aon Hewitt. Pronk emphasizes a point for every employer interested a healthier workforce and lower healthcare costs: that employee wellness cannot be seen simply in the context of the work site, but must create a lifestyle change. “When you think about why safety programs are so successful in organizations, it’s because they’re engrained in the culture,” Pronk is quoted as saying. “It’s part of the way they do their work every day, so we need to work at health and wellness in the same way. We need culture changes to support healthy behaviors in the long term.”
A major health safety hazard of the information and Internet economy of the 21st Century is holding onto outdated 20th Century practices that assume knowledge work can only be performed in a central office location between 8:30 and 5, Monday through Friday. That forces knowledge workers into a sedentary existence that can lead to and aggravate chronic conditions associated with lack of exercise. Riding the commute-to-cubicle treadmill (in a seated position) also sucks valuable time out of their lives, leading many to justifiably claim they lack the time for meaningful, regular exercise and even sufficient sleep. And that’s not even counting the adverse impact on employee engagement and retention. The commute-to-cubicle treadmill isn’t merely a job – it’s a default lifestyle – and an unhealthy one.
Employers that are truly committed to helping their staff members adopt healthier lifestyles must give them the freedom and responsibility to do so by giving them control over their daily schedules. As this blog has noted previously, recently released research has shown the potential of schedule control to support health promoting behaviors – and by extension, healthier lifestyles. Schedule control enables knowledge workers to function whenever and wherever they are productive with the proviso that they stay in communication with their team and management and fulfill their job functions and tasks. It’s an elegant, low cost wellness program that leverages the power of today’s Information and Telecommunications Technology (ICT) and truly represents the kind of organizational cultural change for the 21st Century that Pronk correctly observes is necessary to achieve a healthier workforce.
Last week saw developments in both the large and small group markets signifying advancement of defined contribution employer health benefits. As the term implies, rather than selecting one or more health plans for employees and deciding on deductibles, co-pays, co-insurance and dependent coverage, under a defined contribution system an employer offers employees a fixed dollar amount to be applied toward health coverage. Employees then “buy up” or “buy down” depending on the scope of health coverage they prefer.
The Wall Street Journal reported Sears Holdings Corp. and Darden Restaurants Inc. are adopting the scheme. At the same time, Aon Hewitt announced the imminent rollout of its “corporate health exchange” that it says will offer a broader array of health, dental and vision benefits options than a traditional employer-sponsored plan. According to the firm, benefits will be offered by nine national and regional carriers, including UnitedHealthcare, Cigna and Health Care Service Corporation. According to the WSJ, Sears and Darden Restaurants will use the Aon Hewitt-administered corporate exchange, which will offer five different coverage levels. (Public exchanges that will begin selling coverage in 2014 can also offer five coverage levels based on the actuarial plan value)
Meanwhile, in the small employer market, the Pittsburgh Post-Gazette reports United HealthCare is launching a defined contribution product in the Pittsburgh market. United’s Multi-Choice allows employers with 50 or fewer workers to select any number of plans among 30 separate options, from high-deductible to full-coverage plans.
The large group health insurance market is rearranging itself along the lines of medical utilization with those using more medical services opting for managed care HMO plans and those using fewer services opting for lower cost, high deductible PPO and POS plans. Premium rates are adjusting to this higher utilization, with HMO members expected to see a 9.8 percent bump in 2011, the highest rate increase since 2006’s 10 percent hike, according to a report issued this week by Aon Hewitt.
Since HMOs provide richer benefits but at a higher cost, they are preferred by employees who use health care more often and need coverage that is more robust. “Having a higher mix of these plan participants in HMO plans raises the risk pool, which can drive costs higher,” Aon Hewitt notes. In other words, adverse selection. Once the trend of adverse selection becomes entrenched, the risk pool enters a death spiral of fewer insureds to share costs, requiring big premium increases that speed depopulation of the pool.
Large employers are apparently already feeling those higher prices — and it could ultimately lead to contraction of the large group HMO market, Aon Hewitt warns. “Employers continue to be successful in reducing HMO rate increases by a few percentage points through aggressive negotiations with health plans, changes in plan designs and employee cost sharing,” said Jeff Smith, a principal and leader of Aon Hewitt’s HMO rate analysis project. “Still, these increases have been very difficult for employers to absorb, particularly this year when many companies are focused on economic recovery and complying with health care reform. If HMO rates continue to outpace average health care cost increases, employers may elect to take even more aggressive steps in the coming years, such as eliminating HMO plans altogether.”
This looks like yet another sign of the end of the rich, all inclusive employer provided health coverage of recent decades and a revival of major medical coverage for hospitalizations and other high cost services and not routine or minor ones.