Employees Turn Their Focus to Benefits

As enrollment for 2011 calendar-year plans kicks into high gear, a series of studies suggest that employees are changing their attitudes -- and their demands -- about employee benefits.

For 2010 coverages, many employees (45 percent) actively chose their benefits rather than simply defaulting to what they had in the previous year, according to new research by Hewitt Associates. That's the highest number since the group started tracking the data in 2003. Hewitt's researchers note that cost shifting and changes resulting from recent health care reform will make it even more important for employees to take a close look at their benefits and make the right choices this year.

Not only are employees paying more attention to their benefits, they're asking for more. A new poll by Prudential Financial, Inc., finds that employees want more benefits -- and are willing to pay for them. The survey found that despite pressures created by the recent trend in cost shifting, 20 percent of employees added a new voluntary benefit through their employer in the past year.
Andy Mako, a senior vice president with Prudential, told Business Wire that employees are beginning to view voluntary benefits as a cost-effective way to protect their personal and financial health.

Voluntary offerings also can bolster an employer's recruitment power, according to a separate survey by Wellpoint, Inc. Eighty-three percent of polled employees said they have a higher opinion of employers that offer a selection of voluntary benefits than those that don't, according to a report in PLANSPONSOR.

In fact, almost 90 percent said it was important that companies offer a full range of health benefits, including voluntary offerings. Fifty-six percent said it was "very important."

Employees said cost savings (54 percent), greater protection for their families (50 percent) and ease of mind (44 percent) were the top reasons for enrolling in voluntary programs.


No Slow Grandpas: Firms Wishing to Grandfather Plans Must Act Swiftly

Source: Davis Wright Tremaine LLP [via BenefitsLink]
05-Oct-2010

By Richard J. Birmingham

If you maintain an insured health plan, the starting point for any grandfather analysis is with your insurance carrier. Many insurance carriers serving midsized employers have indicated they are going to issue new policies and, therefore, grandfathering will not be an option.

If you maintain a self-insured plan, or your insurance carrier has indicated it will permit the grandfathering of your health plan, you will need to decide whether you wish to grandfather your health plan before open enrollment materials are sent, since the fact that you are maintaining a grandfathered plan must be set forth in all communications to plan participants.

The basic requirements for grandfathering are:

  • You had a health plan or benefit package in existence on March 23, 2010
  • You had at least one employee covered as of March 23, 2010, and you have employees continuously covered beyond that date
  • You have made either no changes or only the limited permissible changes (as described below) to that plan after March 23, 2010

The decision to be made is whether the inability to significantly change the plan is worth the benefit of not having to comply with some of the requirements of health care reform. Many large employers that are not contemplating significant changes in plan design are electing grandfather status, recognizing that they may change that status in future years, but in the meantime they gain additional time for health reform compliance.

If you elect grandfather status, you will avoid the following health care reform changes that otherwise become effective in 2011 and 2012:

  • First dollar coverage on preventative care;
  • No pre-authorization for emergency services or OB/GYN care;
  • The ability to designate any provider for primary care;
  • The new nondiscrimination rules for insured plans;
  • The new internal and external claim procedures; and
  • New governmental reporting on quality of care and claim information.

In exchange for avoiding the above-referenced health care reform mandates, you surrender your ability to change your existing health care plan in certain ways. Specifically, you will lose your grandfathered status if you change the plan in one of the seven prohibited manners set forth below:

  • Raise percentage costs under the plan in any manner;
  • Raise fixed costs by more than 15 percentage points above medical inflation (with respect to copayments, it’s the greater of the above amount or $5, increased by medical inflation);
  • Lower employer contributions by more than 5 percent;
  • Add or tighten annual limits on benefits;
  • Significantly reduce or cut a covered benefit;
  • Change insurance companies; or
  • Change insurance policies.

If you elect grandfather status, you must maintain records of your plan as of March 23, 2010, forward. In addition, you must state that the plan is grandfathered in all communications to plan participants.

Please contact us if you have any questions regarding the ability to grandfather your health plans.


Researchers See Real Worth in Wellness

Source: Crain's Detroit Business
[via AHIP Wellness SmartBrief]
10-Oct-2010

By Jay Greene

Dee Edington is optimistic that companies are starting to understand the relationship between healthy employees and profitability.

“I am positive about wellness. Companies have been adopting it more the past couple years, and it has grown exponentially,” said Edington, director of the University of Michigan Health Management Research Center in Ann Arbor.

The UM health management center has been conducting research on wellness and preventive care programs for more than 25 years.

. . . When it comes to using wellness programs to improve worker productivity, companies can embark on two economic strategies, Edington said.

“There is the "do nothing' strategy. People will flow from high (health) risks to high costs,” he said. “The second is intervention to help people get healthy or help healthy people stay healthy.”

For the past 30 years there has been extensive research on the importance of exercise, good nutrition and wellness, Edington said.

“The data is out there, and we have tried some things, but not much has changed with disease states,” he said. “We don't have any fewer people with diabetes, we have more obese people, not fewer, and there are no more people exercising.”

But over the past few years, attitudes have been changing, he said.

Companies are starting to look for solutions to rising costs and ways to improve worker productivity.

“You can fix the person by changing (health behaviors), but you have to fix the environment first. Otherwise you are putting a changed person back in the same bad environment,” he said.

Changing the environment can be accomplished by adopting company-sponsored wellness programs. These programs help employees identify high-risk health behaviors by conducting health risk screening tests. The tests measure cholesterol, blood pressure, stress and signs of diabetes or other potential chronic diseases.

Some companies offer smoking cessation support, stress management, massages, yoga, health club memberships or nutritional services.

“Companies are the only entities, besides families, that benefit from changes in employee health. It is so important for corporations to lead this charge for a healthy workplace,” he said.

In his book, Zero Trends: Health as a Serious Economic Strategy, Edington lays out five steps that companies should take on the road to implementing a worksite wellness program.

They are: creating a vision for wellness by senior management; aligning the environment with the vision; training managers and setting health and performance goals; educating employees and rewarding them to encourage sustainability; and developing measurements for return on investment.

“Return on investment has not changed all that much,” Edington said. “We promise ROI, but it is very difficult and often overpromised and underdelivered.”

Edington said a realistic ROI on wellness programs is 1.6 percent to 1.9 percent, although some companies that have high participation rates can get up to 6 percent.


Obesity Poses Massive Problem for Employers

A recent study examining the impact of an obese workforce on companies provides new reasons for employers to consider taking steps to keep their employees fit and healthy.

A new Duke University analysis found that obesity costs U.S. employers a whopping $73.1 billion per year in health care costs and lost productivity, according to a report posted by ABC News.com.

Surprisingly, direct health care costs weren't the biggest loser for employers with an obese workforce. Obese employees' presenteeism -- defined as the productivity lost when sick employees try to work -accounted for the biggest drain on employers at $12.1 billion per year, the study found. In fact, the costs of presenteeism were nearly twice that of medical costs for employers, researchers said.

The study calculated that each male or female worker with a body mass index (BMI) higher than 40 (about 100 pounds overweight) cost employers $15,500 or $16,900, respectively.

Despite the growing problem of obesity, few Americans are choosing to improve their diet, according to a separate study published in The New York Times. After decades of eat-right campaigns by federal and state governments and stricter dietary guidelines, Americans are still snubbing their vegetables. Only 26 percent of the nation's adults eat vegetables three or more times a day, according to recent research by the Centers for Disease Control and Prevention (CDC).

While these studies paint a bleak picture for America's workforce health, some companies are working hard to make a difference -- and save money -- with company-sponsored programs.

One example is IBM, which instituted a special 12-week program of health-promoting activities, according to a HealthDay report. The company offered $150 to participate in the program. But they didn't just try to recruit the employee. IBM worked to get entire families enrolled, which ultimately made a big difference in participation.

"Employers spend a lot of time thinking about how to get their employees healthy, and while the employee is an important factor, what about the family?" asked Dee Edington of the University of Michigan and an author of a study that analyzed IBM's efforts. "When you have a sick child, you also have a sick employee. So, if you're going to have a healthy culture, you need to think about having healthy families as well."

In IBM's program, families sat down, made decisions together and turned it into a family project, researchers said.

The result: More than 11,000 employees -- better than half of those that enrolled -- completed the program.

While the IBM case might not offer hard evidence that such programs save money, experts say any effort by employers to improve workforce health -- including focusing on obesity -- can make a positive difference.

"Some weight loss is likely to be associated with some health improvement. . . . It's a continuous scale of weight and health and dollars," said Dr. David Katz, director of the Prevention Research Center at Yale University School of Medicine.