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HERO Think
Tank ___________________________________________________________________________ e-newsletter
The HERO
Think Tank is a nation wide group of employer and stakeholder (provider)
members who have taken the lead to create employee health management The HERO Think Tank mission is to move EHM forward as a widely accepted and accurately measured strategy to enhance the health of employees and their dependents and thereby, moderate health care costs increases, improve work performance, and maximize well-being. ___________________________________________________________________________ It is recommended that this e-newsletter be printed out and reviewed at your leisure. Bill Whitmer, President & CEO, HERO The HERO Think Tank e-newsletter has taken on a new format. Starting with this issue and going forward, each quarterly issue will contain several brief but highly informative articles that are provided by Think Tank members. The Think Tank has released the new HERO Health Management Best Practice Scorecard (Scorecard). The Scorecard is one of the first self administered instruments to define employee health management (EHM) benchmarks determine best practice. The Think Tank makes the Scorecard available on a complimentary basis. To obtain a copy of the Scorecard, go to www.the-hero.org and click on the Scorecard link where you can download and print a PDF version. If you wish to request a bound copy version, send an email to info@the-hero.org and type “Scorecard Request” in the subject box. After you are familiar with the Scorecard, you are invited to participate in the Scorecard survey by going to http://www.the-hero.org, clicking on the Scorecard Survey link and following the instructions. The 2006 HERO Forum for Employee Health Management Solutions (Forum) was judged by the participants to be a major success. Based on this, the 2007 Forum will be October 2-4, 2007, at the InterContinental – New Orleans. The Forum is a unique interactive experience that features “HOW TO” do it Workshops which are facilitated by managers of the most respected, successful, and data rich employee health management programs. In order to assure individual attention and the highest level of interaction, the registration is limited. For more information and to register, go to www.the-hero.org. I look forward to seeing you in New Orleans. If you have questions, call (205) 969-2680. ___________________________________________________________________________ Health Care Cost Inflation Continues to Drive interest in EHM Tim Butler, MS, CHES, Health Management Analyst, Intermountain Healthcare The relentless health care cost inflation that has been driving an intensified interest in employee health management (EHM) shows little sign of abating. Health insurance expenses continue to be the fastest growing cost component for employers. According to a preliminary report issued by Watson Wyatt based on a survey of 534 companies, large employers are expecting annual median increases for health care costs of 8% for 2007 and 2008. Similarly, Hewitt Associates, in an analysis of the health benefits of 400 major employers, projects costs will rise an average of 7.7% to $8,340 per employee in 2007. Federal forecasters from the Centers for Medicare and Medicaid Services project U.S. health care costs will continue to inflate at about 7% per year for the next decade. While these single digit projections represent a stabilization of the traumatic double digit increases of 2003 and 2004, they are still more than double the general rate of inflation in the U.S. economy. Furthermore, PriceWaterhouseCoopers warns that many employers may still face double-digit hikes in their health care costs in 2007, unless they trim employee benefits packages. Based on an annual inflation rate of about 7%, the Centers for Medicare and Medicaid Services projects U.S. health care costs will double from $2 trillion in 2006 (16% of GDP) to over $4 trillion in 2016 (nearly 20% of GDP). As a result of this trend, by 2016 the average Fortune 500 Company will be spending as much annually on health benefits as it earns in profits. Equally revealing is the fact that in the U.S. we now spend more on medical health care than we spend on food. In an attempt to account for our singularly high health care costs a report by the McKinsey Global Institute concluded:
Clearly, there can be no effective restraint of spiraling health care costs without the active and coordinated participation of providers, insurers, consumers, employers and employees. While the McKinsey analysis shows that there is no simple single answer to the health care cost crises, EHM strategies are proving to be an integral component of the ultimate workable solution. Sources: Little Relief From Health Benefit Cost Increases Expected. Watson Wyatt, National Business Group on Health Survey Finds: Employers Focus on Improving Employee Health. Watson Wyatt Worldwide. Press Release, Feb. 2, 2007. http://www.watsonwyatt.com/news/press.asp?ID=17089.
_________________________________________________________________________ The Affinia Group - Partners in Health Program Bob Soroosh, MBA, Director, Benefits Administration, Affinia Group The Affinia Group is a global supplier of top quality automotive components for under hood and under vehicle application (brakes, chassis, filters, etc.). In North America, the Affinia family of brands includes Wix Filters, Raybesto and Aimco brakes products, and McQuay-Norris and Spicer chassis parts. Affinia has over 11,000 employees in 19 countries around the world. Affinia Group’s USA operations struggled with double digit increases in health care costs from 1999 through 2003. But starting in 2003, Affinia’s USA facilities launched a health management initiative provided by StayWell Health Management which emphasized disease prevention and health promotion. The 2003 initiative included a health risk assessment coupled with a preventive screening, which was followed by Affinia people voluntarily enrolling in targeted health risk reduction programs from StayWell. Approximately 94% of Affinia’s USA employees participated in the StayWell program in late 2003 through early 2004. Covered spouses who were not employees were not included in this program. Following Affinia’s divestiture from Dana Corporation in December 2004, Affinia began work to set up its own health plan which integrated the StayWell program directly into the design of Affinia’s major medical plan. Affinia’s “Partners in Health” plan started in Jan-2006, and gave Affinia people a $1,000 per year lower premium for health insurance if they and their covered spouse (if any) agreed to participate in the StayWell program. This approach of linking a lower health insurance premium to participation in a bona fide wellness program resulted in a 99% participation rate in the StayWell program of both employees and covered spouses. The results of the 2006 Partners in Health initiative are very encouraging. First, and most importantly, there has been a major improvement in the health status of Affinia’s people when StayWell compared the 2006 screening results to the results from 2003. In 2003, approximately 33% of employees were in the “high health risk” category. By the 2006 screening, approximately 14% of Affinia people were in the “high health risk” category, a major improvement. There was a similar improvement in the good “low health risk” category, which grew from only 12% in 2003 to 21% in 2006. Second, Affinia’s medical and prescription drug costs were actually lower in 2006 than in 2005 on a per employee per year basis. Part of this containment of health care costs was attributable to the improved health status of Affinia people, while some of the cost improvement was a result of Affinia’s migrating to a full-replacement consumer-driven health plan administered for Affinia by Definity Health, a UnitedHealth Group company. As Affinia moves into 2007, it is integrating the StayWell program with its Definity disease management program by having the disease management team on site during the 2007 StayWell screenings at major locations. The preliminary results of this approach have been a much higher participation rate in the disease management program, designed to help people control chronic conditions such as diabetes. Affinia’s long-term goal is to build a culture that encourages and supports healthy lifestyles and preventive screening by continuing to reward participants with lower health insurance premiums, and by enabling them over time to build up the balance in their health reimbursement account within Affinia’s consumer-driven health plan. ___________________________________________________________________________ Incentives and HIPAA Ralph Colao, Senior Consultant, Mercer Human Resource Consulting EHM incentives are one of the critical core components for a successful program. As the popularity and effectiveness of incentives increases, questions relative to HIPAA guidelines rise to the surface. In January of 2005, the Center for Prevention & Health Services, part of the National Business Group on Health, prepared and distributed an Issue Brief discussing and reviewing various types of benefit incentive plan designs and their relative legality. In December of 2006, the Department of Labor issued its final regulations regarding Wellness programs. While health plans may not prohibit unhealthy individuals from joining the plan, a plan may receive a special exemption to the Health Nondiscrimination Rules if the plan design is linked a Wellness program. Previously, this exemption was referred to as a “bona fide wellness program”. Four requirements must be satisfied for there to be a Wellness program:
In other words, for an employer to take full advantage of the Wellness program exemption, the financial incentive being offered to employees and/or families for meeting a particular health status goal must not be greater than 20% of the full cost of employee-only or family coverage, if dependents are eligible to participate in the Wellness program. The employer must make the incentive available to enrollees who do not satisfy the health goal if the enrollee offers proof that they a) is unable to reach the health goal due to a medical condition and b) participates in a “reasonable alternative” healthy lifestyle program. Finally, the employer must notify in plan documents that the incentive is available to enrollees who cannot meet the health goal due to a medical condition as long as they participate in an alternative program. Examples of incentive plan ideas that do not meet discrimination rules:
Examples of incentive plan ideas that do meet discrimination rules:
Whether you consider them “carrots” or “sticks”, incentives that are valued and important to employees and their families will provide the impetus to effect behavior change. To reap the business benefits most important to employers today, aggressive management of health care costs and maximizing worker productivity, modifying unhealthy lifestyle behavior and reducing or minimizing health risks are critical. Contact your benefits plan administrator or benefits consultant for further design specifications and requirements. Excerpted from the Issue Brief “Building Health Lifestyle Incentives into Health Plan Design”, Center for Preventive & Health Services, National Business Group on Health. January 2005, Volume 2 No.1.www.businessgrouphealth.org and the Federal Register: December 13, 2006 (Volume 71, Number 239)Rules and Regulations, pages 75013-75055. ___________________________________________________________________________ “A person who has health has a thousand wishes, Anonymous ___________________________________________________________________________ If others in your organization would like to be added to the HERO Think Tank e-newsletter mailing list, send an email to: info@the-hero.org and type “Think Tank e-newsletter” in the subject box. If you do not wish to receive future issues of the HERO Think Tank e-newsletter, send an e-mail to: info@the-hero.org and write “remove” in the subject box. |
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