UA Turns To Wellness Programs to Counter Rising Healthcare Cost Trend
By Rachel Voris
What’s The Issue?
No matter what kind of lifestyle you lead or what health choices you make, everyone seems to agree on one thing: something has to be done to control health care inflation and the trend of rising costs. For this reason, employers all over the nation are turning to workplace wellness programs as part of a solution to the problems at hand.
According to Director of Benefits at the Statewide Benefits Office Erika Van Flein, wellness programs are one of the few ways to take cost out of the plan, by reducing the need for healthcare services.
A wellness program would work to reduce the number of risk factors in the UA employee population. “Rates probably aren’t going down because of healthcare inflation, but we can work to reduce the trend. Cost trends are not something to be viewed on the short term. Instead, the goal is to make a difference over time, using wellness programs to slow down the rate of increase in costs,” Van Flein said.
What’s the Background?
Though a vendor has not been chosen for the new UA wellness program, there are standard, typical features of wellness programs that members can look forward to. Some features will look very familiar, such as onsite screenings, flu shots, an online tracking program, and fitness challenges and contests similar to UAF’s fittest winner contest.
Onsite coaching, group meetings and screenings are important elements of wellness programs. In years past, the UA attempted to do telephonic coaching with staff placed into high-risk or moderate-risk groups after completing health risk assessments, but telephonic coaching was not well received. Elements of the WIN program have been well received by staff, especially the individual health planning sessions (IHP). IHPs can help a variety of needs, including the top risk factors for the university, which are stress, weight and sedentary lifestyles.
Step 1: Initial Phase
Starting the wellness program with the health risk assessment and reporting biometrics will help bring basic health awareness to plan members and provide a baseline. Employees might be having their blood pressure checked for the first time in years or may be having their cholesterol tested for the first time ever. Those are the moments of realization human resources is looking for with the initial phase of the program, set to begin in early 2014. The current wellness program has screening components, but the program has been voluntary and offered little incentive for employees to participate. In addition, it’s hard to track the effectiveness of the program when you don’t have a consistent group of participants, or cohort group, year over year.
Van Flein hopes the new wellness program structure, which will offer a price incentive of up to 30 percent of the cost of the lowest priced plan, will generate more employee participation than in the past. Many employer plans consider participation rates of 25 percent to be a success. The goal for the university with the new pricing differential will be at least 60 percent member participation.
Instead of rewarding members who participate in wellness programs with gift cards or other incentives used in the past, the shift to the price differential incentive was mainly to get more attention from employees. Spouses were invited to participate in wellness program in the past but were not eligible for incentives. This year, both spouse and employee can receive the price incentive.
“We heard the message loud and clear that cost matters to employees when we changed rates last year. If cost matters, maybe this will be the right incentive for employee participation. And since the program is not mandatory, everyone has a choice to not be engaged and just pay a little more for healthcare,” Van Flein said.
The Carrot or the Stick?
There is much debate concerning wellness program structure and employee incentives. Some argue that offering employees a carrot, or reward, motivates better than implementing a punishment, or stick, for employees who don’t participate in wellness programs. It has been proven among adults that sticks work better to motivate people, but the work environment can suffer as well as employee morale. The university is looking at a combined approach, using both the carrot and the stick with wellness programs, a trend that many others nationwide are using as well. The FY15 rates will be priced with that in mind. If members choose to participate in the wellness program, they will receive a reward back in the form of the pricing differential.
The new wellness plan unfolding and price differential demands attention and gives employees more opportunity to be engaged in their health and related costs. But for those who choose not to participate in the program, and eventually those who don’t make positive steps towards healthier living, the pricing structure could be viewed as what seems like an orange colored stick.
Wellness Programs and The Affordable Care Act
In the future, the wellness program will become outcomes based. At that point, the Affordable Care Act mandates that alternatives must be offered for people who can’t meet the goals outlined in the program, like blood pressure levels. The goal of the program is not designed to charge sick people a higher cost. A person may have many health conditions and still qualify for the benefit as long as they are working towards goals and tracking numbers, according to Van Flein.
Wellness Programs and the Law
Wellness programs must comply with a number of federal and state requirements, such as the Genetic Information Nondiscrimination Act (GINA) of 2008. When GINA came into effect, every wellness program had to modify their health risk assessments. The assessments have been revised to no longer ask about family history, even though this information can be a true indicator of issues. The information can be discussed with your doctor, but the wellness program can’t ask for the information.
The Health Insurance Portability and Accountability Act (HIPAA) of 1996 is the reason a third party administrator is used for wellness programs results. The university does not know the results of any screenings but only knows if you are participating. HIPAA also includes a non-discrimination clause. Everyone will have the same opportunities to set their goals and meet objectives. If it is medically unreasonable to do that, an alternative program will be set up. The wellness provider will work to provide those alternatives. Van Flein explained one such alternative, saying if someone has a family history of high cholesterol, they may eat right and work out, but they still can’t get their LDL below a certain level or make a lot of improvement. People in those situations will be offered alternatives, like education or seminars, to reach wellness programs outcome results.
There are some concerns in the national conversation on health care and wellness programs that say an individual should bear responsibility for their health and behavior instead of having an employer stepping in to control those matters.
According Van Flein, the trend to use wellness program to improve health trends is something that is taking place nationally by employers.
“Everyone is responsible for part of the health care cost as we are a self-insured company. These programs are used by employers to ask employees to be a little more committed to the bigger picture and the bottom line.”
Coming Up Next
Many issues are still to be determined for wellness programs nationwide and for the university. It will be important to keep in mind that regardless of perspective, carrot or stick, wellness programs seem to be one of the few options in a long-term effort to control costs and create a healthier member population. Next month’s article will be focused on open enrollment beginning in mid-April.