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Benefits Business Encouraging wellness through incentives Tracking progress, offering rewards and discounts result in higher use of wellness programs By Len Strazewski
When the health insurance premiums of their clients don’t rise as much as the national trend, agents and brokers who sell employee benefits can take some measure of satisfaction that they have done as much as they could with policy marketing and plan design to control costs.
But can they really say they are helping plan participants become healthier and make better decisions about the way they use their health benefits? Only if their insurer is encouraging wellness, providing incentives and tracking performance says, Robin Gallagher, vice president of Associated Agencies, Inc., in Rolling Meadows, Illinois. Associated Agencies is a large multiline agency with about 100 employees and a balanced book of property/casualty insurance and employee benefits business. Gallagher says the agency has been promoting consumer-driven health plans from nearby Destiny Health for about three years and she is starting to see some positive improvements—not only in total cost—but also plan participant behavior, thanks to a program of health incentives. “When you the see the cost increases moderate, you know you’ve done a good job as a broker, but when you see employees listening to music on an iPod they earned with their wellness incentive program, you know you are changing their lives for the better.” The Destiny Health wellness incentive program is one key component of the health insurer’s consumer-driven health plan model which can now be integrated with new health savings accounts (HSAs) or the older health reimbursement accounts (HRAs). In April, Guardian Life and Destiny Health announced a joint enhanced HSA that is underwritten by Guardian Life and integrated with the consumer-driven health plan administrated by Destiny Health The plan was first introduced for employers in Illinois, Virginia, Maryland, and Washington, D.C., and is being rolled out in other states. The HSA plan, which provides a tax-advantaged way to fund noncatastrophic health costs, including over-the-counter medications, was enabled by Medicare reform legislation more than a year ago and has slowly been adopted by health plans around the country, with or without other consumer-driven health features. Plan participants can contribute up to $2,600 for an individual and $5,150 for a family before taxes. Interest is tax free and savings may be rolled over from year to year. The older HRAs also allow participants to create savings accounts but are less portable and provide fewer tax incentives. While HSAs can be combined with high-deductible insurance plans, they are not yet commonly available from traditional health insurers as an integrated product. “People seeking an HSA may not be aware that many solutions are really two different entities—a high deductible insurance plan and an HSA offered through a separate institution,” Destiny Health Chief Executive Officer Scott Spiker explained in the announcement. Destiny Health, which is owned by Discovery, a South Africa-based insurer, has been marketing HSA-like accounts internationally for more than 12 years, according to Spiker. The integrated product available in the U.S. provides seamless claims management and record keeping, a wellness incentive program, and a prescription drug plan from Destiny Health, and a medical network from Guardian Life. In September 2005, Destiny announced a series of enhancements to the program, including major additions to the Destiny Health Vitality incentives program. Among the improvements is an integrated health risk assessment provided by the University of Michigan Health Management Research Center. The health risk assessment can be used to provide specific health progress and information to plan participants and comprehensive group trend information to employers, says Mark Smith, Destiny Health chief sales officer. “The health risk assessment is designed to give plan participants more information on which to base their health care management decisions,” Smith says. “If consumer-driven health plans are to be successful, participants must become more informed health care consumers and more aware of how their individual decisions affect their health. “The health risk assessment is a powerful report from a respected institution. The feedback from the assessment will give individuals direction in their ongoing decision process,” he says. However, Smith says the employer analysis of trend data will provide the biggest boon to agents and brokers as well as their employer clients. “Agents and brokers are always searching for new ways to provide added value to their client relationships. This analysis allows agents and brokers to become involved in a more consultative way as they assist their clients in making plan design and cost control decisions,” he says. The Vitality program allows participants to earn wellness points or Vitality Bucks which can be used to earn merchandise—such as iPods and other personal electronics, cash rewards and discounts. Participants earn rewards and advance from Bronze to Silver, Gold and Platinum status in the program, by participating in preventive health care programs, public fitness events, or working toward lifestyle changes such as weight reduction and smoking cessation. The program also offers discounts to Life Time Fitness, a national chain of fitness facilities, which vary by program status levels. Smith says the chain has agreed to track health plan participant attendance to help them earn more Vitality Bucks. Smith says the wellness incentive program was recently revised after results were validated by employee benefits consultants Millman USA. The study indicated that indivi-duals and couples who participate in the Vitality Program not only have lower-cost insurance claims but also more effectively manage their health savings accounts. Destiny Health Guardian Life also announced a preventive medication rider available to participants which provides first-dollar coverage for medications used to treat the 10 most common chronic disorders, including diabetes, asthma, and high cholesterol. Gallagher from Associated Agencies says the incentive program has been effective in building individual participation in wellness activities. “It’s a wonderful program and seems to make a big difference in healthy behavior. If promoted well by the employer, it can really help build health awareness,” she says. Richard Korner, a broker and employee benefits consultant with Managed Care Marketing, Ltd., (MCM) in Chicago, says the wellness program is an important component in the consumer-driven health plan model. MCM is a 10-year-old brokerage with 12 employees that specializes in marketing health maintenance organizations (HMOs) and consumer-driven health plans. Korner, whose company has been marketing the Destiny Health program for about one and a half years, says the new program makes wellness and incentives for wellness programs more tangible than ever before. “In the past, agents and brokers could encourage clients to provide wellness programs such as health club memberships and educational program but they couldn’t provide any documentable evidence that the programs really do contribute to cost savings. “The Vitality program connects programs with participation incentives and yields real data that will help shape decisions in the future,” he says. However, Korner cautions that marketing consumer-driven programs demands that agents promote them aggressively and educate their clients about the administrative structure of the programs. It’s not for agents who just want to carry in quotes at renewal and deliver policies, he says. Meanwhile, health care cost increases may be moderating as more employers trim the benefits they offer employees, shift more costs back to employees or make other plan design changes, including a shift to a consumer-driven health plans. According to a survey of 1,883 employers released in mid-September by Mercer Human Resource Consulting and Marsh Benefits in New York, human resource and benefits professionals predict an average increase of 6.4%. However, survey respondents said this moderate cost increase prediction was a direct result of benefit reductions or other plan changes made during this year’s renewal. If they had not made changes, the respondents said they would have anticipated increases of nearly 10%. Nearly two-thirds of large employers who responded to the survey say they will shift more cost to employees to achieve their predicted increase, either by increasing the portion of premium paid or the out-of-pocket payment maximums. “We used to think of cost-shifting as something you could do only every so often. But we’re seeing a new willingness on the part of employers—born of desperation—to shift cost in successive years to achieve acceptable cost increases,” explains Blaine Bos, the Mercer Minneapolis office leader for health and group benefits. “At the same time, we’re helping many employers with longer-term initiatives such as health management and consumerism, with encouraging results,” he says. * The author |
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