Employers committed to Reform Benefit Strategies and Wellness Programs

Despite a challenging economic environment, U.S. companies continue to view health care benefits as a vital part of their workplace “deal” with employees and are enlisting their active participation in efforts to improve workforce health and control program costs, according to a survey of close to 500 HR and benefit executives conducted by professional services firm Towers Perrin. This evolving employer-employee relationship of shared responsibility on health care underscores companies’ ongoing efforts to rein in costs, but also highlights new approaches they are pursuing to change the system and the underlying drivers of spiraling health care costs.

“Employers recognize that we can’t keep doing the same things and expect different results,” said Dave Guilmette, Managing Director of the Towers Perrin Health and Welfare practice. “So we’re beginning to see leading companies taking steps to change the system from the inside out, focusing on new benefit designs, incentives for employees and providers, new technologies and new ways to measure and deliver the value of workforce health.”

Significant numbers of survey respondents see the current economic crisis as an opportunity -- over half (53%) say they are trying or considering new benefit strategies they would not have considered otherwise. Almost three-quarters (70%) of employers are increasing communication to address employee concerns, and well over half (57%) said they are not cutting back on investments in benefit communication and education.

Notably, the survey also found that 50% of companies have or will introduce or increase investments in wellness and health promotion in 2009 and 2010, and 41% have or will introduce or increase investments in care/disease management programs.

What’s more, many employers are upping incentives to ensure their employees will participate in the programs. Nearly one in three companies (32%) in the survey have or will introduce or increase financial incentives for wellness or health promotion activities in 2009 and 2010, and another 30% are considering this action. Employers are also getting tougher on employees who opt out: Nearly half of the companies (45%) in the survey have, will or are considering introducing or increasing penalties for nonparticipation in wellness or health promotion activities.

“In previous economic downturns, investments in benefit communication and employee wellness were among the first to get cut from a benefit program,” said Guilmette. “The firm commitment to and increasing investment in employee wellness we’re seeing today shows that more employers are beginning to recognize the long-term financial benefit and business advantage they can achieve by improving the health of their employees.”

Other techniques employers are implementing to contain their health care costs for active employees include:

• More than 60% of employers have or will tighten benefit provisions in prescription drug plans.
• 52% of employers are increasing or planning to increase employee cost sharing.
• 40% are introducing or expanding the use of account-based health plans (with reimbursement or savings accounts).
• 18% of employers plan to tighten and/or increase the enforcement of dependent eligibility provisions in 2009 or 2010.

On the retiree medical front:

• 51% of employers either have or will reduce or eliminate subsidized coverage for future retirees.
• 41% either have or will reduce or eliminate subsidized coverage for current retirees.
• 28% have or plan to provide employees with new ways to save for retiree medical expenses.

Methodology

The Benefits in Crisis survey drew responses from 480 HR and benefit executives from a cross section of midsize and large organizations in the U.S. It was conducted online in February 2009.