Benefits Business
Bringing wellness, other cost reducers to agency clients
Results of two studies indicate strong interest from employers and employees
By Len Strazewski
If you want to be a leader in the employee benefits business, take a close look at the health-related services provided by the health plans you represent. Then look a little further.
Employers are asking for an increasingly wide array of wellness, preventive and fitness services, according to new research from two leading health insurers—and many of them may not be available directly from health plans.
“There’s a huge unmet need among employers who are looking for employee benefit solutions that include wellness and health-related services that are generally not sold in connection to health plans,” explains Jerry Ripperger, national practice leader in consumer health at the Principal Financial Group.
“And when employers have unmet needs, they turn to their agents and brokers for help,” he says.
Principal Financial and the Harris Interactive polling company surveyed more than 1,100 employees and more than 500 retirees of small to medium-sized employers (10 to 1,000 employees) about their attitudes and perceptions regarding their employee benefit programs. The survey was conducted online late last year and released in January.
As most agents and brokers would expect, the employees identified concerns about the complexity of their benefits and rising health care costs. About 42% of respondents said their employer offered more than one health plan option; the largest employers were more likely to offer three to four health plan options.
About 60% of respondents said they expected their health care costs to increase in 2008, with about 38% saying they expected deductibles to increase and 21% saying they expect their health plan designs will change to reduce overall coverage.
The employee responses mirror employer concern, Ripperger notes. “Whenever we talk to chief executive officers or chief financial officers, their number one or number two concern is health care—managing it and dealing with the costs.”
As a result, employers are taking a hard look at the factors that affect health care costs and, according to Ripperger, are applying risk management principles to their health insurance planning.
“CFOs are used to thinking in risk manage-ment terms. They understand the economic values of eliminating or reducing risk as a primary means of reducing costs. In the world of health care, risk reduction involves applying the principles of wellness and preventive programs.”
Ripperger says a growing number of employers are offering either wellness or fitness benefits for the first time or are expanding their wellness services and employee tools, creating new opportunities for agents and brokers that can bring to their clients local programs and services that can easily be integrated with health plan options.
“The return of investment in terms of health care spending, reduced absenteeism and worker productivity has already been well documented,” he says. “Employers can expect about a two-to-one ROI for their investment, and that is more than significant.”
Most health plans are already directly offering some forms of preventive and health improvement services such as health screening, disease management programs and financial incentives for more healthful lifestyles, he adds, but some employers are already expanding their benefits beyond their insurance contracts—with a positive response from employees.
Nearly half of employee respondents (45%) expressed interest in health plans that contain a wellness component that would allow employees to have reduced co-payments or deductibles. And asked about the wellness benefits they would most like to see their employer offer, more than one-third of respondents cited employee fitness centers (34%), 24% requested fitness center discounts, 18% requested weight management programs and 14% asked for weight management program discounts.
Other uninsured wellness benefits and services cited include access to nutritionists, fitness equipment discounts, smoking cessation programs and maternity management services.
While the employee respondents noted that some employers were offering some services, the benefits available lagged behind their interest. The most common wellness services already offered by their employers were educational tools (14%), fitness center discounts (14%) and fitness facilities (11%).
“Health care and fitness delivery is essentially local,” Ripperger says, “Fitness centers, weight reduction programs, smoking cessation and other health improvement programs need to be accessible and available to employees if they are going to be used successfully.”
“Agents and brokers need to be ready to guide their employer clients to these programs and help them evaluate how the programs can meet their strategic needs,” he says.
Employee benefits research from MetLife in Bridgewater, New Jersey, confirms these trends. According to the MetLife Fifth Annual Employee Benefits Trend Study, about 28% of all employers and nearly half (49%) of companies with 500 or more employees offer some type of a wellness program as a workplace benefit and 43% of employers said they believe these programs are highly valued by their employees.
The study also found that:
—34% of employers with 500 employees or more offer targeted prevention programs.
—28% of these employers provide on-site medical clinics.
—15% of all employers and 29% of the larger employers offer health care advocacy services.
Dr. Ronald Leopold, MetLife vice president and medical director, says the data suggests that employers are beginning to shift the responsibility to employees not only by increasing premium contributions and co-pays or by adopting consumer-directed health plans, but also by focusing on wellness and prevention.
This trend not only reflects employer concern with group health insurance premiums, but also their realization that health issues influence other cost drivers within their organizations.
“Employers are focusing on the overall health of their employee population both as a means of reducing their health insurance costs but also as a way of reducing the health-related expenses linked to workers compensation, disability, absenteeism and productivity,” he explains.
‘The consolidated data from claims across health, disability and workers compensation programs indicates that healthier employees are more productive, have less lost time and less frequent claims in all programs,” he says.
Dr. Leopold advises agents and brokers to develop local contacts with health service and fitness providers in their area as both a resource to their clients but also an additional way to differentiate themselves in an increasingly competitive insurance marketplace.
“This is a very ripe area for agents and brokers who are trying to build their employee benefits business and increase their value to their customer base,” he says. “Small employers in particular rely very heavily on their agents and brokers to coordinate services in their geographic area.”
Dr. Leopold says agents and brokers can, among other services, coordinate local health fairs for employees, bringing together various fitness and wellness services in a workplace presentation.
They can also contribute to health education by polling local health care providers about classes and community health services, identify occupational health providers that can also conduct health screenings and identify local counseling services such as Employee Assistance Programs (EAPs) and health advocacy services that are not provided by health plans.
The author
Len Strazewski has been covering employee benefits issues for more than 20 years and is employee benefits editor of Human Resource Executive magazine. He has an M.A. in industrial relations from Loyola University.