Many employers get stuck in the mindset that an employee’s health is individual and essentially out of the company’s control. But as health care costs spiral and employees’ health indicators elevate to unhealthy levels, wellness programs have become the focus for many employers hoping to foster an environment of mutual accountability.
Prior to the Patient Protection and Affordable Care Act (PPACA), consumer surveys revealed something interesting: when asked what they want most out of health care reform, the #1 request was protection against insurance companies denying coverage. A close second was a desire to see a strong focus within the reform bill on disease prevention. So how has the PPACA affected these programs and excess costs?
In addition to mandating prevention and wellness programs as “essential health benefits,” the bill lifts the employer cap on wellness incentives from 20% to 30% of premium costs. As a result of this increase, a recent survey indicates 60 percent of employers are more likely to create or extend their wellness programs. Some employers see this as the most effective way to control long-term costs. Nationwide, a three-to-one return on each dollar invested in employee wellness has been well documented.
So now that the PPACA has arrived, what happens next? Health care providers as well as wellness experts believe that once health care reform is better understood and implemented, it will undoubtedly lead more companies to implement workplace wellness programs, resulting in employers’ number one health care concern — cutting excess costs. While the PPACA does its part to increase access to health care, many employers are wondering whether some of the reform elements might increase their overall cost burden. To combat this possibility (and because employer health costs are unsustainable regardless), we expect to see more focus on responsible cost sharing with employees.
Fundamentally changing the way health care is financed by linking cost to behavior is the most effective and accountable way to re-shape the paradigm of ever eroding employee health and increasing costs. The financial side of health has never been more of a focal point. It’s clear the conversation is far from over.