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Wellness – Size Seems to Matter

David P. Lind BenchmarkSize really does matter – it appears.

For many years, we have asked thousands of Iowa employers whether they offer some type of wellness initiative, and if so, what components do they include in their program. From our 2011 Study, we do know that Iowa employers offer the following wellness initiatives:

  • 44 percent offer Medical Information to their employees through a website, newsletter, etc.
  • 26 percent of Health Screening Programs
  • 23 percent offer Smoking Cessation Programs
  • 22 percent offer Chronic Disease Management Programs
  • 21 percent offer Health Risk Assessment Programs
  • 21 percent offer Health Club discount/reimbursement Programs
  • 18 percent offer Weight Control Programs

When we look a bit closer at these numbers, we see a very consistent theme (found in all past studies) – smaller employers are clearly less likely to embrace wellness initiatives (see below).

 David P. Lind Benchmark

A few primary reasons that smaller employers do not offer wellness initiatives relates to cost and time. Smaller employers have fewer resources than their larger counterparts, and therefore desire to spend their time and money on keeping their business, well, in business! For the typical small Iowa employer, focusing on the basics of their business is paramount to surviving in these harsh economic times.

Due to sheer cost, offering health insurance might be considered a ‘necessary evil’. But offering health coverage allows the employer to compete with other employers for qualified workforce talent. From our studies, we know that smaller employers are less likely to offer health insurance to their employees. Compared to larger Iowa employers, small employers tend to receive higher rate adjustments to their health plans, year after year. From this, small employers are forced to drastically change plan designs that shift additional costs to employees through higher deductibles and copayments. When employees have to pay more through higher cost shifting, many may forgo (or delay) seeking health care services altogether. This unintended consequence can be detrimental to the long term interests of small employers.

It may be time for smaller employers to reconsider offering sensible wellness initiatives – perhaps not to expect immediate relief in health insurance premiums, but to promote a healthier, more productive workforce. Size should not really matter when it comes to having a healthy workforce.

 

A More Sensible Lifestyle

Now here is a study to stand up and take notice.

According to researchers who used data collected for the National Health and Nutrition Examination Survey (NHANES), reducing the number of hours spent watching television to fewer than two hours every day may extend life expectancy by nearly 1.4 years. In addition, if we can just limit our sitting down each day to no more than 3 hours, we can also increase our life expectancy by as much as two years!

I have read articles about sedentary life and the adverse outcomes that follow…higher obesity, diabetes, cardiovascular problems, etc. This study goes a step further by linking lower life expectancy to the unhealthy lifestyle choices we make, namely, living a sedentary life. The study does acknowledge, however, that the researchers “assume” a causal association rather than “proving” that sedentary lifestyle will negatively impact how long we may ultimately live. This seems to be an intuitive assumption…so I’ll buy into this.

As organizations attempt to make a more positive impact to the health of their employees, maybe Iowa employers should find creative ways to keep their employees standing for longer periods…such as providing adjustable desks that allow employees to stand up when using computers and phones, require staff meetings to be shorter in duration (less sitting), or simply encourage walking breaks. Standing all day at work, however, can cause our bodies to endure the natural force of gravity, pulling the body down and causing the muscles to be tense…resulting in pain, etc.

Clearly, living a more moderate lifestyle between sitting and standing seems to make the most sense!

Waiting for 2014 and Beyond

David P. Lind BenchmarkUncertainty remains…we continue to wait.

A Deloitte study was released on July 24 indicating that 9 percent of employers in the U.S. said they may stop offering health insurance in the next three years. Based on numerous study results from last year, this number is not at all surprising. In fact, we surveyed Iowa employers last summer and found that less than 6 percent of employers reported the possibility of dropping health coverage when 2014 arrives (see below).

2011 Iowa Employer Benefits Study 

So what gives? Why do employers feel that they may no longer offer coverage? For one, in 2014 employers with over 50 employees who fail to offer minimum essential coverage will incur a penalty of up to $2,000 annually per employee. In addition, if employees are required to pay more than 9.5 percent of their income for self-only coverage, the employer would be penalized $3,000 per year, per full-time employee who enrolls in the exchange and is eligible for government subsidies…a non-deductible expense to the employer.

Perhaps another more plausible approach employers might take would be to pursue a “defined contribution” strategy whereby the employer provides a defined amount of money to each employee who will then purchase coverage through the exchange. Keep in mind that by 2014, individuals will not have to worry about pre-existing conditions when applying for individual coverage. Employers may find this approach more palatable than offering their own health plan, which takes time and resources to keep the plan in compliance (and remain competitive).

When we asked Iowa employers whether they would terminate their current group medical plan, pay the $2,000 penalty per employee, and increase employee compensation with the money saved from dropping health coverage, less than 1 percent said they were “very likely” to pursue this approach (see below).

 2011 Iowa Employer Benefits Study

There are many studies to draw from when attempting to understand what employers will do in 2014 and beyond. Needless to say, there is still much confusion from the employer community about how the health reform law will impact their health coverage.

Playing a “wait and see” approach may be the most logical strategy for the time being.