Talking About Financial Matters That Affect You and Your Organization
Would You Pay Your Employees to be Healthy?
Mar 17th, 2017
Equality could be the death knell of Employee Benefits plans.
We may be turning a corner – or at the very least approaching a fork in the road where our options for sustainability do not include current models.
The impact of high cost drugs, and escalating health care costs in general is shifting the landscape for employers. While the shift is dramatic (relatively speaking) – collectively the response has been slow and reluctant.
Don’t believe me? Think I’m fear mongering?
Scan the homepage of the Benefits section (http://www.benefitscanada.com/benefits) on the Benefits Canada website. Take a quick count of the sheer number of articles on prescription drugs. It’s staggering. Everyone agrees on the problem, few on the solution.
Here’s a great article on the rising costs of health care globally (it’s not just a Canadian problem).
Here’s another article on drug formularies – one of the options being presented as a viable solution.
I could go on and fill up pages with great, informative articles – but will leave that to you should you wish. The point is “Houston we have a problem.”
I’d say not more than a day or two goes by without a conversation with a client about the impact of high cost drugs on the cost of their Employee Benefits program. While some of these are “What if” conversations, the pendulum is definitely swinging to the “What now” conversations.
The bulk of our clients are small and medium businesses. They are the hub of the economy in most communities. These employers are most at risk to be negatively impacted by escalating health care costs. In many cases - a single employee with high cost prescription drugs can spin employee benefits costs out of control. And if employees pay a portion of the monthly premium – everyone is impacted.
Right now I’d suggest most are playing a version of “Russian Roulette” hoping they can squeak by without being impacted. Others are trying to pick up the pieces after the implosion.
So here’s a thread of an idea – and I’d love to hear your thoughts on it:
Fact: Employers are going to have to change the way they cover prescription drugs. This carte blanche approach we currently use (in most cases) is honestly ridiculous and defies logic.
Therefore – let’s assume as an Employer you restructure your benefits programs – some much needed changes to keep costs in check for everyone and ensure sustainability.
Now – what if employees could be rewarded for “being healthy”? Maybe that means they get bumped up to a premium plan with more coverage? Maybe they get funds allocated to a health care or wellness account? Maybe their portion of monthly premium is paid by the employer instead? Equity, not equality.
If you read the article above on escalating global health care costs – you’ll learn that a large bulk of the problem is related to lifestyle diseases like obesity, stress, high blood pressure and physical inactivity. Those are, in essence, avoidable costs.
Wellness programming has been around a long time and globally it has an impact – on those that engage. However – I’m not sure we’ve closely tied wellness to outcomes such as coverage and cost. We are inching that way in other areas (you can now get preferred rates and rewards on life insurance based on leading a healthy lifestyle – on an ongoing basis – not just at point of initial sale).
Would it work? Would you (employer) buy employees Fitbits (or similar devices) and then let them earn better benefits coverage or lower costs? Certainly there are some pitfalls to work around but they are simply obstacles and not roadblocks.
The employee benefits industry – comparatively speaking is a technology laggard. This could present an opportunity to leap forward.
I’d love to hear your comments, thoughts and feedback. Dialogue helps ideas evolve