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Employers turn to consumer-based health initiatives

Large corporations are looking to boost wellness programs and invest in high-deductible plans as health benefit costs continue to rise.

By — Posted Aug. 17, 2012

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Consumer-directed plans and wellness programs are gaining interest as a way to control health care benefits costs, with many employers planning to boost financial incentives to encourage workers to adopt healthy lifestyles, says a survey released Aug. 6 by the nonprofit National Business Group on Health.

These types of initiatives put the onus on the American public “to have some skin in the game and take responsibility for their health care,” said Judith Wethall, an attorney in the employee benefits practice group of national law firm Littler Mendelson PC. “It’s the wave of the future.”

Larger corporations have been rolling out these plans for some time, but Wethall said even smaller employers are turning to consumer-directed plans.

Health care benefits costs are expected to rise next year by an average of 7%, the same increase projected for 2012 but less than what employers have experienced in previous years, the survey said. In polling 82 of the nation’s biggest corporations, NBGH found that 60% of these employers were planning to raise premium contributions paid by employees in 2013.

Most said the premium increases would be minimal, although 40% said they would raise in-network deductibles, while a third planned to raise out-of-pocket maximums and out-of-network deductibles.

“Although cost increases have stabilized somewhat, they are still on a higher base from last year and are simply not sustainable, especially when our nation’s economy and workers’ wages are virtually flat and everybody is struggling,” Helen Darling, NBGH’s president and CEO, said in a statement.

Cost-shifting strategies such as raising premiums aren’t going to go away, but few survey respondents cited this as the most effective way to clamp down on benefits costs. By comparison, 43% of the respondents in this year’s survey thought consumer-directed plans would be most effective in controlling costs. Nineteen percent cited wellness initiatives.

Consumer-directed plans, which are essentially high-deductible plans coupled with a health savings account, can save money on premiums, Wethall said. Employees still bear some risk by paying higher deductibles, but theoretically they can offset that risk by pulling money out of the HSA to meet that deductible, she added.

Large employers also said they planned to raise incentive amounts for employees who participated in wellness initiatives, according to the survey. The median amount workers can earn is expected to rise from $300 in 2012 to $450 in 2013. Some of these incentive programs focus on specific health outcomes related to tobacco use, cholesterol levels and body mass index.

The American Medical Association addressed wellness initiatives at its Annual Meeting in June, adopting a policy that urges doctors to apply 15 core competencies of lifestyle medicine, as well as offering evidence-based lifestyle interventions, to address chronic disease.

Respondents of the NBGH survey said they are making changes to comply with health system reform. As an example, half said they no longer had annual benefit limits, although a third said they had not made any adjustments to their annual limits in 2012. The survey was conducted before the Supreme Court’s June 28 announcement to uphold the Affordable Care Act.

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