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Doubts over wellness programs could unravel employer health coverage

December 18th, 2014

Questions over the effectiveness of employer wellness programs intensified this month and could mark the beginning of the end of employer-sponsored health benefits that have already been eroding from the bottom up in the small group market segment. Wellness programs seek to improve the health status of large employer risk pools in order to reduce the utilization of high cost medical services and to hold down premiums for large insured employers. Now that their efficacy has been called into question, it also begs the larger question of the degree of control large employers have over health care costs. The experience with wellness programs suggests little if any. As Bill Leonard writes for the Society For Human Resource Management:

Even with the modest rise in health care costs over the past several years, sources familiar with the issue believe businesses have reached a tipping point and that the expense of providing medical benefits to workers has become unsustainable. Cost-containment efforts therefore are putting more pressure on wellness programs to deliver on the promise of reducing health care expenses. However, as the CHRO survey and other recent studies have shown, wellness plans may not be producing the return on investment (ROI) that employers expect and need.

The sense of no control over rising costs could prompt large employers to increasingly throw up their hands and cease offering health benefits. The money saved could then be redirected to higher earnings and compensation that couldn’t be done when the U.S. government established wage and price controls during World War II and employers first began offering employee health benefits in lieu of higher compensation. That in turn would create pressure to repeal the Patient Protection and Affordable Care Act’s mandate that employers with 50 or more employees offer health coverage.

There would also be a philosophical motive. Employers and employees alike could rightly declare health is an individual responsibility. Accordingly, the role of employing organizations would shift from a medicalized view of wellness – one that wellness program critics equate to nannying — to one that promotes a culture of wellness that supports healthy lifestyle choices and affords their members sufficient schedule control to engage in health promoting behaviors such as adequate sleep and exercise. Those behaviors require time and commitment in order to become healthy lifestyle habits. For office-based knowledge workers where the greatest occupational hazard is sedentary lifestyles that lead to preventable chronic health conditions, giving them greater control over when and where they work would provide a mutually beneficial tradeoff for taking responsibility for their health. That could pay bonuses in the form of increased engagement and staff attraction and retention.
 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

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