Health care plans continue to evolve

fromdemocratandchronicle.com



(October 30, 2005) — Two groups of workers — women vs. men — squared off recently to bolster their health.



Mirror Show Management workers donned pedometers for eight weeks, hoping to be the group that walked the most steps to win a vacation day.



"There wasn't a lot of interest — well, until there was an extra day off involved. Than people were publicly declaring their devotion" to the competition, joked Andy Fort, a senior designer and leader of the "Sneaker Kings," the group of male workers who won the competition.



In doing so, Mirror Show in Rochester became the latest workplace nationally to give workers incentives to bolster their health, just one way companies are strategizing to keep health care costs down in the face of probably another year of double-digit premium increases.



But not all their strategies will be as welcomed by workers. Health benefits packages for 2006 — which workers are now being asked to sign up for — reflect the fact that companies are continuing to shift the cost burden onto employees.



Workers will find fewer options, plus policies with higher deductibles, co-payments and premiums. And in some cases, companies will be charging workers more for health insurance if they have an unhealthy habit such as smoking.



The goal? Give workers more responsibility for managing their own care dollars. In other words, if it costs more, they may pursue healthier lifestyles, or at least spend their health care dollars more wisely — researching costs, requesting cheaper generic drugs and avoiding unnecessary services, officials said.



Out of pocket



Rather than health maintenance organizations, in which workers pay a small, fixed co-payment for services, more companies are switching to preferred provider organizations. Those plans offer smaller premiums in exchange for more money out of pocket. And instead of a fixed co-payment, workers will be more likely to pay a percentage of the cost – for example, 20 percent of the bill rather than $20.



Employer-sponsored medical coverage is also changing to better prepare workers for the health plans of the future.



These "consumer-driven health plans" link a high deductible — let's say $1,500 for an individual and $3,000 for a family — with a health savings account. The accounts include money from the worker and perhaps the company that workers can use to pay for health care.



To get workers accustomed to such plans, a company might add items such as smaller deductibles to the health benefit. Since the deductible has to be met before the health insurance kicks in, workers will have to start paying more attention to how they spend their health care money, said Rich Bannister, chief executive of Providium Consulting Group in Perinton.



That means workers will need tools to compare the quality and costs of local health care services and providers, which Excellus BlueCross BlueShield, Rochester Region, has developed and Preferred Care is readying.



A small number of companies here and nationally offer such plans. The area's largest insurers, Excellus and Preferred Care, reported a lot of interest in the consumer-driven plans, but not a lot of companies actually adopting the plans.



One company considering such a move is the 130-worker Performance Technologies Inc.



"We now have a system that doesn't have a lot of cost containments in it," said Chief Financial Officer Dorrance Lamb. "But when employees are responsible for a deductible before they dip into their insurance, they'll be much smarter about how they spend their money."



The company wants to ensure workers have enough time to be educated on the new plans.



"This will be a big deal for our workers," he added. "This will be quite a change for them."



Focus on wellness



Workers should expect fewer health plan options in 2006.



Not only is having fewer health plans easier to administer, but such a move can mean a company has or is on the verge of changing the way it funds its worker health insurance, said Michael Faillace, an employee benefits practice leader at Brown and Brown of New York Inc. in Rochester.



Most of Rochester's top employers have moved to plans that base their health insurance rates on the health of their work force, rather than the community average. This could help companies lower premiums, and also to collect more data on the health of their workers, enabling them to craft more wellness programs that specifically target their needs.



Studies have shown that good wellness programs with high participation rates can get about a $3 return on investment for every dollar spent.



Johnson & Johnson Co. — which employs more than 1,000 people at Ortho-Clinical Diagnostics Inc. in Greece — has reported savings of about $225 annually per employee on medical costs among those enrolled in its wellness programs. That's a total yearly saving of about $8.5 million, mainly in reduced medical expenses such as doctor and hospital bills and in related administrative expenses such as processing paperwork.



Wellness programs locally include those at Birds Eye Foods Inc., which has an onsite fitness facility and runs competitions among workers to eat healthier, lose weight and exercise. Incentives range from free items like gym bags to gift certificates at Dick's Sporting Goods, said Diane Mohorter, the group insurance benefits manager.



There's also that program at Mirror Show, which was offered through Excellus' Step Up program and included a push to get workers eating more fruits and vegetables.



Vithya Ajavananda also said a benefit offered by his employer, Paychex Inc., helped him quit smoking. The company helped pay the costs associated with him quitting cigarettes — such as nicotine gum and prescription drugs.



Ajavananda, 32, has tried to quit for five years. He hopes his latest attempt — he's been clean for a month — will stick. He said smoking is getting expensive, and he's had family members who've suffered from smoking-related health problems.



Incentives



Last year, smokers cost the United States $157.7 billion in health-related economic costs, according to the U.S. Surgeon General's Office, and a lot of that tab was picked up by health plans.



Some companies are doing what Paychex did, offering financial help to smokers who want to quit. One of the newest trends, however, involves companies making tobacco users pay more for their health insurance.



For example, employees of Gannett Cos. Inc., owner of the Democrat and Chronicle, will pay $50 a month more toward health care next year if they smoke, and Xerox Corp. is giving workers an extra $200 annually for their health care — up from $100 last year — if they are tobacco-free. Probably fewer than a dozen Excellus customers have such programs "but we are going to see companies more and more adopting a strategy that links healthy behavior to employees' out-of-pocket costs," said Scott Ellsworth, president of Excellus in Rochester.



Laurie Beaudin, a legal secretary and smoker for 30 years, said she understands why employers would want workers to quit smoking, especially since they're more likely to have health problems down the road.



"It's the company that's paying for the health care, so what choice do workers have?" said Beaudin, adding that her law firm, Christiano Gallant & Coletti, hasn't pushed her to stop her habit.



But Karen Fleming, who works at another local law firm, called the smoking surcharge arbitrary. Other habits such as excessive eating and motorcycle riding also pose big health risks, she said, wondering whether there soon will be charges for those.



"The thing is, where does it stop?" she added.