Saturday, July 13, 2013

Tie Behaviors to Employees' Health Care Costs

It's completely legal to tie employee behaviors that affect their health, either positively or negatively, to their cost (premium co-pay) of health insurance.     

Virtually every Chief Executive Boards International meeting includes some ideas on mitigating health care insurance costs.  The most profound of these ideas several years ago resulted in the CEBI Medical Expense Reimbursement Plan referral program, which is currently saving CEBI members an aggregate of half a million dollars a year.

Years earlier, in 2004, CEBI had its first Executive Briefing at a National Summit on Health Savings Accounts.   In the meantime, many members have adopted hybrid strategies combining these ideas as appropriate for their situations.      

Further, courts have now held that it is, in fact, OK within certain guidelines to incentivize employees for "healthy lifestyle" behaviors, which would, of course, include disincentives for "unhealthy lifestyle" behaviors.    Here's an interesting, thorough article on some of those considerations.  These plans tend to be most successful if supported by some "coaching", usually provided by a third party or perhaps your insurance carrier. 

One interesting side effect of such programs is that your company becomes more economically attractive as a place to work for healthy people and not so attractive for unhealthy people.   That self-selection process alone could be an astonishing long-term driver of cost and productivity.  

In a recent CEBI meeting, a member mentioned something that has nothing to do with premium co-pays.  Instead, he's offering a direct (pre-tax, of course) contribution to an employee's HSA account based on wellness habits, such as participation in a company wellness plan or gym membership, not smoking, etc.   He will contribute up to $1,150 per employee annually, based on those criteria.  

If you have used incentives, successfully or unsuccessfully, to incentivize wellness habits of your employees, click "Comments" below and share them with others.   

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Terry Weaver

Chief Executive Boards International

Chief Executive Boards International: Freedom for business owners & CEOs -- Less Work, More Money, More Freedom to enjoy it

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