Employers Turning to Employees to Trim Health Care Costs

June 2, 2011 (PLANSPONSOR.com) - Employers are beginning to rely more on employees to stem the tide of rising health care costs, according to Aon Hewitt.

Aon Hewitt surveyed 1,028 employers nationwide in its 2011 Health Care Survey and found that the top health care outcomes organizations would like to achieve this year are improving employee health habits (56%), lowering the health care cost trend (49%), decreasing worker health risk (44%), increasing participant awareness of health issues (37%) and enhancing participation in health improvement/disease management programs (37%).  In addition, the survey revealed that many companies offer disease management (70%), health and wellness improvement (64%) and behavioral health (60%) as key components to health care strategies.    

However, the survey suggests that success in reaching outcomes may be difficult, as 56% of respondents say motivating participants to change unhealthy behaviors is the most significant challenge to accomplishing 2011 health care program goals.  This was followed by issues involving reluctance to change (26%), unpredictability of costs (23%), government regulations/compliance (22%), and managing the health of an aging workforce (21%).   

In an acknowledgement that more needs to happen to achieve success, many organizations are looking to expand efforts during the next three to five years and implement strategies that focus on total well being to improve physical and mental health (60%), absence management (53%), and integrated safety and health improvement efforts (50%).

Incentives and Disincentives  

The Aon Hewitt survey also showed that 22% of employers will have programs in place by the end of 2011 to reward participants for achieving specific health outcomes, and 10% will have similar programs to penalize participants for exhibiting unhealthy behavior.  However, 64% of organizations said, by 2016, they will add programs that reward for good health, while 46% said they will add programs that penalize for unhealthy outcomes.    

Respondents currently offer incentives to employees for participation in key initiatives, such as biometric screenings (33%), health risk assessments (33%), wellness programs (31%), and tobacco cessation programs (27%).  Conversely, some employers are imposing a penalty for non-participation in biometric screenings (5%), health risk assessments (5%), wellness programs (2%), and tobacco cessation programs (6%).  

Money serves as the primary incentive and penalty these employers use to promote employee participation in key programs, including health risk assessments (66% have a monetary incentive; 9% have a monetary penalty); biometric screenings (65% have a monetary incentive; 8% have a monetary penalty); disease/condition management (54% have a monetary incentive; 9% have a monetary penalty); and wellness programs (59% have a monetary incentive; 6% have a monetary penalty).    

Other survey findings include: 

  • Less than 20% of organizations have performance goals tied to wellness success or participation levels, while 49% plan to add this type of program in the next three to five years; 
  • By 2016, 77% of employers plan to have targeted communications on their health care programs, based on workforce demographics; and 
  • By 2016, 61% of employers plan to use social media to reinforce smart health behaviors and actions with their plan participants.