Rewarding employees who have healthy habits is good for your company.
Today, businesses are working harder than ever to make the most of every dollar they earn. But rising healthcare costs continue to eat away at profitability. Here's what a recent TowersWatson/National Business Group on Health report tells us. Employers pay 36 percent more for healthcare than they did five years ago. In that same five years, employees paid 45 percent more of their own money for healthcare.
The sustainability of businesses will be a challenge if this trend continues. Healthcare reform alone cannot solve the problem. But some businesses have found a way to control costs. For them, the best way to lower healthcare costs is simple: Help keep their employees healthy.
Reward workers with healthy habits, or punish those with unhealthy ones?
The way to keep workers healthy and out of the healthcare system is prevention. Companies should consider how to move focus away from treating people after they are sick rather than before. They need to help employees learn how to stay well.
Companies pay over $1,500 more per year for health coverage for workers at high risk. These include people who smoke, have high blood pressure or are overweight.
As CNN/Money tells us, many businesses require employees to take health risk appraisals. These test things such as blood pressure, cholesterol, and body mass index. Employees must take these to be eligible for healthcare coverage.
If these tests show that you're healthy, you might get a $50 gift card. Or, you could get extra money in your Health Savings Account.
Pepsi Bottling offers incentives - things that make people want to try harder - to encourage healthier habits. Employees receive $75 gift cards for taking health risk assessments. They earn $100 more for taking part in a lifestyle management program. The company also offers free nicotine replacement therapy to employees who smoke.
Another way Pepsi Bottling is lowering healthcare costs is through its free health clinics. Johns Hopkins University runs these clinics at several plants. They offer annual physicals and other basic care at no charge.
Seth Serxner is a principal at Mercer, a major employee benefits company. He said the key to success for these programs is participation.
"Historically, this has been a challenge," Serxner said. "Cash incentives and variable premium levels are incentives that are working. The use of penalties is gaining attention, too, but they're still used infrequently." Serxner said the most effective incentive methods are those that offer rewards.
Simpler incentive plans help your bottom line.
To reach this goal, many businesses are offering employees rewards for staying healthy. The results are positive.
Human resource directors and benefits managers have a lot of homework to do. Some programs want employees to take part in one-time-only activities. For example, a company may ask its workers to take a health risk assessment. Other programs encourage healthy habits, like exercising and eating right. Even in companies that offer these programs, many employees don't know they exist.
A few companies have made it easy on themselves. They've put together several incentive-based programs in one package. These programs offer many plusses. It's easy on employees. It's easy on employers. Most important, more employees take part, meaning better results.
For employees, this approach helps them know exactly what's offered. It's easier for them to learn how to use the program to earn rewards.
Most important, employees become engaged in improving their health. HumanaVitalityTM is an example of an integrated program that's working. The American Journal of Health Promotion did a study of the program. Findings showed that highly engaged members became healthier than their non-engaged co-workers. Also, highly engaged members had lower healthcare costs. They were admitted into hospitals less frequently. And, when they did go to the hospital, they had shorter stays. To learn more, go to Humana.com/vitality.
