Wellness: Personal Freedom or Employer Mandate?
Several recent industry surveys confirm that employee wellness plan implementation is on the rise, particularly the use of "results-based" incentives or penalties that are tied to the actual achievement of a health standard rather than mere enrollment into a program that may or may not result in a desired outcome.
What's certain is that "one size does not fit all" and that "disruption of the status quo does not have to mean mass chaos". After all, we've all heard that the definition of insanity is "doing the same thing over and over but expecting different results each time". Few could argue that our health care benefit system is anything other than insane and that a disruptive change is essential to changing the trend.
Every CEO, elected official and leader of a meaningful team knows that consensus is ideal but typically unrealistic. As we enter an election year, we will choose a president and representatives who have to uphold the constitution and the "will of the people", knowing that they could never possibly represent the "will of all people".
Just think about issues like abortion, immigration and how to handle the deficit. You know that no matter what you do, at times half of the nation will think you are an idiot or you failed. A leader must rise above the criticism and make the tough calls that are essential to the long-term success and, at times, survival of their organization or nation.
Not a fun spot to be in, yet very rewarding when it results in sustained growth. After all, how many employer's mission and vision statements contain the words "to provide our employees and their families with health insurance"? Businesses exist to fulfill a stated purpose, taking care of employees is part of every good businesses' credo but if they aren't managing the bottom line, there soon won't be any employees to take care of.
Effective communications and "plain talk" to employees is very effective in making "personal accountability" part of an organization's fabric. Disruptive change will inevitably create anxiety and strong opinions. I recently sat next to a man on an airplane who was sharing how he missed being able to smoke on an airplane.
He was lamenting how certain states didn't let him smoke in restaurants either. He shared that he wrote letters to congress and to the airlines years ago but "nobody cared". Really? Do you think nobody cared that they had an unhappy customer or an offended and upset voter?
Or perhaps, they placed the greater good of the people and the organization above the strong (and loud) emotions and beliefs of a group that didn't share that perspective? As a society, we've watched this play out with things like motorcycle helmet laws and seatbelt laws right? I remember how angry my grandfather was about being told to wear a seatbelt or pay a fine.
Wasn't that his right? Even though the legislatures could prove the increased fatality rates and the massively higher costs to treat injuries, should they remove a person's personal freedom to take an increased personal risk? The wellness rules are not about "punishing the sick" or retroactively underwriting risk.
Those professing this either haven't read or don't really understand the rules.In the workplace, we see mandatory hard hats, steel-toed boots, safety goggles and so on. Isn't that employer micro-managing? The employer wants their employee to be safe. They also need to avoid the OSHA fines and penalties and the costly lawsuits that follow an employee who fails to adequately protect themselves.
Large fines and lawsuits have caused organizations to close their doors forever. Now, with the typical cost of employee health benefits hovering at $11,000 per employee per year and trending and 13% annually, don't our government and corporate leaders have a similar obligation to introduce disruptive change that preserves the long-term viability of their organizations?
Just as "toes were stepped upon" when cigarette smoke disappeared from airplanes, calmer heads and reason will prevail. The current rules protect those who legitimately cannot achieve a healthy goal due to a medical issue; shouldn't all others be expected to face consequences like higher premiums or deductibles if they don't help their organization avoid the demise of their employee benefit plan by making progress toward healthy living?
In my opinion, this controversial disruptive change will cause a season of discomfort, some hard questions and massive amounts of education and communication but, within a few short years, it will be accepted as "obvious" and become as common as the "good driver discount" is in the auto insurance industry.
It is very possible to adjust the portions of premium and levels of benefits that individuals pay in order to influence and motivate better choices, without eroding the concept of insurance whereby many people pay a little so that that the few who experience an event are able to afford the best possible care.
Do people realize that auto insurance is intended to cover "accidents", defined as: "sudden and unforeseen events, caused by external means"? You might have a $5,000 repair bill because you never changed your oil and you ruined your car's engine. Your insurance company would not cover that claim because it was due to neglect and it was certainly not an unforeseen event.
Every manual in the world can predict what will happen if you neglect to maintain your engine. The same is true of tobacco use and the impact of obesity on our heart and lungs yet we have let the employer's health plan bear the burden of the cost associated with neglect. I personally believe that if auto insurance paid for a new engine whenever you failed to change your oil, millions of people would stop changing their oil.
The Final Wellness Rules for Group Health Plans issued by the Department of Labor and now adopted by PPACA provide a fantastic outline of how outcome-based wellness plans can be implemented without being overly aggressive, unreasonably harsh or truly unfair to those with medical issues that make the attempt to achieve a goal unreasonably difficult or medically inadvisable.
I don't understand the opposition coming from entities that claim to have a mission of health and wellness and the comments like, "next year they will penalize you if you are left-handed or if you wear glasses". The authors of the regulations did their homework and were very careful to limit the categories, the financial impacts, the communication standards and the appeal requirements required when outcome-based plans are implemented.
Bravo Wellness now has dozens of cases that demonstrate the positive impact these plans can have on health improvement, trend reduction and on both the employer and the employee bottom line. While I can clearly see short-term financial gain for the employer due to the "cost-shifting" that occurs as employees decline to participate and/or fail to achieve an outcome based goal, we are also seeing that the "cost-shifting" dollars are also decreasing every year because more employees are passing the goals every year.
Will the mere use of cash cause everyone to quit smoking and lose weight? Of course not, but it can and does work for many of them. Others will need more intrinsic motivation and significant support. The good news is that now employers have a way to pay for that support. The surplus premium contributions collected can be immediately reinvested into coaching and outreach support.
When an employer has a budget (say $500 per employee per year) for program administration, health outreach and traditional incentives and communication, I think the ideal approach is to give the employees a year or two of support and coaching before considering an outcome based approach. Unfortunately most companies don't have this luxury.
A company with 1000 employees would need $500,000 for step one. Usually, the "wellness plan" dies right there or it gets morphed into a health fair with T-shirts, pedometers and balloons. When the employees have "skin in the game," (typically at least $50/month of premium adjustment for wellness participation and results), you can expect over 90% participation and immediate readiness to change from a significant part of the population.
And while many HR administrators are terrified of how their morbidly obese three-pack-a-day smoker is going to react, they are typically pleasantly surprised by how many of the self-disciplined, health conscience employees go out of their way to applaud the fairness of the program.
They are even more surprised by the number of obese smokers who have no problem with the concept, especially when they understand the exceptions that exist for those with legitimate medical issues.Unlike most founders of "wellness" companies, I personally failed to earn my incentive for body mass index and cholesterol.
I felt fine and many people even said I looked pretty good, at least compared to other guys my age. Without results-based rewards, I would not have pushed myself to eat better and exercise. The plan forced me to compare myself to "healthy" rather than to the people around me.
Personally, I'd use a penalty for non-participation in an assessment, full rewards for achieving favorable results or significant progress- relative to obesity, tobacco use, blood pressure, cholesterol and glucose and partial rewards for failing to manage these issues but willingness to accept help offered.
Of course the full reward would still apply for those with documented medical issues that completed an alternative goal.I do not favor the automatic receipt of full rewards for enrolling in a program unless the original goal was in fact medically inadvisable or unreasonably difficult due to a medical condition, and even then, I would couple the program completion with an outcome-based alternative goal that an individual's physician thinks would be reasonable for them to attain (i.e. if you are 150 pounds overweight, the goal might be to complete a course and lose 20 pounds).
An organization's culture, budget and timeline will dictate whether they should use rewards or penalties, pass/fail goals or progress goals, a preliminary year of coaching and education or intervention only for those who fail.
The "one size fits all" approach is simply not practical given the diversity of businesses today but every organization can and should do something that is results-based. After all, history has proven that a non-disruptive approach will just produce insanity.
About The Author
Jim Pshock is the founder and CEO of Bravo Wellness and IncentiSoft Solutions. His career spans over 20 years in the health insurance industry. He has developed a comprehensive and unique expertise in the regulations related to governing wellness programs and the practical application of incentives to improve employee health.