Healthcare perks may be harder to come by
Does your company pay your gym membership? Better start using it.
Hundreds of thousands of Americans who get their health insurance through their employers have gotten used to company perks such as reduced-cost gym memberships, free weight-loss or smoking-cessation programs, or getting cash back for filling out health-assessment profiles.
But a new survey reports that a small but growing group of firms will be imposing tougher requirements to get the incentives, such as actually losing weight or quitting smoking.
“As companies struggle to deal with low levels of employee engagement and face limited budgets for financial incentives, employers are demonstrating a growing interest in requiring results from those health engagement activities before handing over financial incentives,” says report coauthor Ted Nussbaum, a senior consultant for the benefits consulting firm Towers Watson, which wrote the report along with the National Business Group on Health, an organization that advocates for lower health costs for large businesses.
The report, which was released in March, surveyed 507 companies with at least 1,000 employees each. It found that 37% of the companies offer incentives only to beneficiaries who meet the company’s requirements and an additional 23% plan to do so in 2011. Each company has its own requirements, which could include, among other things, employees acknowledging whether or not they smoke, completing a health risk appraisal, having an adult health exam, maintaining body mass index and/or blood pressure and/or cholesterol levels within target levels, and completion of health coaching or a disease management program for a chronic condition such as asthma or diabetes.
Viverae, a health benefits firm based in Dallas that creates wellness programs for employers, says 90% of its 55 corporate clients now require results from employees, such as weight loss or a health exam, to get or keep incentives such as gym memberships or perks such as gift cards to coffee shops.
Nussbaum of Towers Watson says that rising healthcare costs are the driving factor behind the decision to want to see results in exchange for financial health incentives.
A plus side to all this is that some firms have begun extending valuable incentives far beyond gym memberships — albeit, again, with strings attached. Vita-Mix, which makes blenders and employs about 240 people in Cleveland, lowers the health insurance deductible for employees who meet certain health criteria, including being nonsmokers and falling within target ranges on BMI, weight and cholesterol levels. (Ed Paul of San Diego, a sales manager for the firm, met all four criteria and saw his deductible lowered by $2,000, or $500 for each measure met.)
Some attorneys say there could be legal challenges to attaching strings to perks, but many experts disagree. Life insurers have long set higher rates for smokers than for nonsmokers, Nussbaum notes. And Michael Nadeau, chief executive of Viverae, says that some firms take into account employees who are medically unable to reach certain benchmarks, such as people who are disabled and therefore unable to exercise.
Dr. David Katz, director of the Prevention Research Center at Yale University, suggests that consumers view this emerging trend by employers as an opportunity rather than a call for legal action. “People paying fully out of pocket for their health insurance also should be stopping smoking or losing weight, if necessary, just to improve their health and live a longer and healthier life. If the firm you work for is going to reward you beyond the better breathing, circulatory system and physical flexibility that come with changing your lifestyle, that’s icing on the cake.”
Most companies renew health insurance coverage for their workers each January and announce changes, such as new rules on health perks, between October and December. (Some do so even sooner.) Because placing conditions on perks looks to be a growing trend, Nussbaum suggests carefully checking the information packets that come with health insurance sign-up sheets.
In the meantime, Katz says, for the good of your health if nothing else, now may not be a bad time to start making use of the perks you now get without strings attached.
