Benefit Insights blogs are written to help the modern Employee Benefits Adviser navigate the world of benefits and wellness. #healthinsurance #employeebenefitsadviser
While intrinsic motivation should ultimately drive an individual’s healthy behavior, we work with many clients who use financial incentives as an extrinsic catalyst. Encouraging employees to take notice of a program and engage in wellness initiatives can help set them on a pathway to understanding what will ultimately keep them personally motivated long term. However, in order to kick-start a healthy culture and gain the most benefit there are key strategies employers should focus on:
1. Maximize the ACA 30% incentive allowance as part of the benefits plan
A key provision within the ACA that can be leveraged to support healthy cultures is the incentive allowance for participating in wellness programs. Offering employees a reward equal to the value of 30% of an individual annual premium can be a huge motivation.
In 2014 one of our long term clients, N.E.W. Plastics - a medium sized manufacturing company - increased their annual premium rebate to the maximum 30% level. This was based on their confidence it would continue to help them drive population engagement and outcomes. Over the past 4 years they have reduced their high-risk population from 30% to 14%.
2. Use this incentive to motivate employees to take the RIGHT actions
The ACA enables employers to segment their employees based on their willingness to adopt healthier lifestyles. It doesn’t matter how healthy individuals are today, just that they are willing to take positive strides. This dynamic helps organizations create a healthy culture, by keeping the focus on performing healthy actions. It sends an important cultural message that health matters. It can also help employers maximize their investment, by focusing the benefit budget on those willing to engage in healthier behaviors.
However, providing a significant incentive for employees to only complete an HRA or biometric screening will not move the needle on population health outcomes. Although baseline data can be helpful to create individual awareness and evaluate aggregate trends, in isolation it is just that – baseline data. But, if employees are motivated to earn similar rewards by completing tangible behaviors, like physical activity tracking, or other action-based initiatives, everyone can win.
3. Keep the program simple by focusing on key behaviors based on employee health status
Simplicity drives population engagement, so it is important to offer a clear and simple pathway for employees to follow. Cleveland Clinic, a client we added in 2015, practices this approach by offering their employees and spouses a premium discount based on either simply (i) completing a care management program or (ii) achieving physical activity levels if they do not have a chronic condition.
Two-thirds of Cleveland Clinic’s eligible population qualify for a premium discount and during the past 5 years they estimate they have saved over $85M. While their program has many engaging components David Pauer, Employee Health Plan Wellness Director stresses that “…the primary driver [of engagement] is the incentives.”
Financial incentives can work as a catalyst to create healthy cultures. Maximizing the ACA allowance, focusing on the right healthy actions and keeping requirements simple could help your clients see similar results.
Dave Hoinville is director of business development at myInertia. He has 25 years of experience focused on population health management, including roles as program director, general manager, EVP sales and business development.