Would You Walk Your Way to Lower Insurance Costs?

With the cost of healthcare, and by extension health insurance costs, in America continuing to rise, many employers and health insurance companies are looking for ways to decrease spending. One idea that has been gaining traction is recent years is wellness incentive programs. From the glossary at www.healthcare.gov, a wellness program is “A program intended to improve and promote health and fitness that’s usually offered through the work place, although insurance plans can offer them directly to their enrollees. The program allows your employer or plan to offer you premium discounts, cash rewards, gym memberships, and other incentives to participate. Some examples of wellness programs include programs to help you stop smoking, diabetes management programs, weight loss programs, and preventative health screenings.” While the U.S. Equal Employment Opportunity Commission is currently hammering out the details on how wellness programs may be implemented under the PPACA, the programs do not by their very nature violate the Americans with Disabilities Act.

Currently, many health insurance carriers offer plans with either a lower premium, lower out of pocket costs, or both for subscribers who meet certain wellness benchmarks. The two main criteria of these plans typically revolve around smoking and obesity: If you are not overweight or a smoker, you receive the incentives, and if you are overweight or you smoke, you may qualify for the lower costs by entering a treatment program to lose weight or to quit smoking.

According to Blue Cross Blue Shield of Michigan, 50% of all health insurance costs are due to unhealthy habits. In fact, four of the top five leading causes of death in the US are chronic diseases often attributed to lifestyle choices. Diabetes is the second biggest driver of health care costs, followed closely by heart disease. Further, per a 2011 Gallup poll, “Full-time workers in the U.S. who are overweight or obese and have other chronic health conditions miss an estimated 450 million additional days of work each year compared with healthy workers — resulting in an estimated cost of more than $153 billion in lost productivity annually.” Clearly, it behooves an employer to create a culture of wellness, possibly including workplace wellness programs, some of which may be tied to group health insurance plans.

The big question, then, is will employees play along? A 2013 study published in the journal Translational Behavioral Medicine found that when given the choice between paying 20 percent more for health insurance or exercising more, the majority picked the fitness route. In the study, employees were provided with fitness trackers, with a goal of walking 5,000 or more steps per day. The findings are startling; 97 percent of the 6,548 enrollees met or exceeded their goal of 5,000 steps per day after one year.​​

While some consumers fear a loss of privacy, the ability to tailor the costs of health insurance more individually based on preventative care is appealing to many others. When asked, one of my friends said, “I genuinely like the wellness incentives in my workplaces, one of which includes fitbit activity trackers. They return quite a bit of money to us for engaging in wellness activities. Some of it is in premium reductions, some is in the form of HRA accounts, and I’m actually using money from a grant funded by the wellness program to attend [an exercise retreat]. Like it or not, insurance companies are part of our healthcare system and it is time for that system to be about promoting overall health, not just treating illness or injury.” Another one indicated that she would like to take advantage of her worksite’s wellness programs, but that that the reporting is cumbersome. She said if it were linked to a fitness tracker, such as a Fitbit, it would make it easier for her to participate. The general consensus was that employees prefer the carrot to the stick, and would rather see incentives for participating than penalties for not enrolling in the programs.

The Affordable Care act encourages the implementation of certain types of wellness incentives by raising the legal limit on penalties that employers can charge for health-contingent wellness programs to 30 percent of total premium costs, and can charge tobacco users up to 50 percent more in premiums. According the the Department of Labor’s website, “Evidence shows that workplace health programs have the potential to promote healthy behaviors; improve employees’ health knowledge and skills; help employees get necessary health screenings, immunizations, and follow-up care; and reduce workplace exposure to substances and hazards that can cause diseases and injury. The proposed rules would not specify the types of wellness programs employers can offer, and invite comments on additional standards for wellness programs to protect consumers.”

The proposed EEOC rule on application of the ADA to employer wellness programs is expected to be finalized this summer.