Employers offer policies to reward workers for healthier living

Employers offer policies to reward workers for healthier living April Shipp is laced up and ready for her daily 45-minute trek around Chrysler's spacious Auburn Hills headquarters. The 50-year-old UAW benefits coordinator attends occasional Zumba, yoga and weight-loss classes at work and has access to a free personal trainer in the company's state-of-the-art fitness center. The company even has a pharmacy and Henry Ford Health System clinic on site. With so many opportunities to shape up, Shipp has lost 18 pounds and gotten her cholesterol to healthy levels without medicine. "It's the healthiest I've ever been," she said. And by agreeing to take an annual online health assessment and working on goals identified in it, Shipp gets a break on her Blue Cross Blue Shield of Michigan policy. It amounts to $1,200 in yearly savings in deductible expenses and other out-of-pocket costs. "This has been a real plus for me," Shipp said of her workplace health benefits. "I'm thrilled. I have no plans to leave here." Employers all over the country, from big companies to city governments, increasingly are offering health insurance policies that reward or penalize employees for progress on personal health goals. Typical goals -- identified in yearly online health tests that employees voluntarily take -- include smoking cessation, weight loss and management of high-blood pressure and cholesterol. Coaching, either by telephone or through a Web-based program, usually is available to help people through tough spots. Twenty-seven percent of 536 midsize Michigan businesses surveyed earlier this year tied incentives, such as lower monthly premiums, to health goals, according to McGraw Wentworth, a Troy benefits analysis firm. The average worker got a $329 reduction on monthly premiums, or $687 for a family, the survey found. The average extra monthly charge for smokers was $41. Within the next two years, 61% of the companies surveyed said that they would or were highly likely to tie incentives to health goals. It's a trend that is expected to grow by 2014 because of a provision in the federal Affordable Care Act that will allow insurance plans to increase penalties for habits such as smoking. The charges could be as much as 50 per cent of a smoker's monthly premium. The government still needs to issue rules on how the penalities would work. Interest is high Insurance penalties continue to be controversial. Major companies, including Chrysler and General Motors, are holding off on them. "The evidence is not clear it does drive change," said Steve Morgenstern, a health and insurance plan leader for Dow Chemical, a Midland-based company nationally recognized for its year-round wellness programs. Dow offers two state-of-the-art fitness centers, outdoor walking trails and complete reimbursement for some classes involving diabetes education and weight reduction. It has used health risk assessments for 50 years to encourage workers to shape up but doesn't tie progress on goals to penalities. The wellness programs alone "absolutely helped" save money on health bills -- an estimated $121 million since 2004, Morgenstern said. Among health insurance experts, as well as leading organizations of people with chronic diseases, there are concerns that penalizing employees will hurt the people who need to see doctors the most because they won't be able to afford their share of the bill. There also is no good evidence the plans save money and improve health in the long run, they said. But with costs rising, both for employers and workers, interest in the plans is high. Employers spend $5,000-$7,000 a year on health expenses for overweight employees, compared with $3,900 for those of average weight, according to the International Foundation of Employee Benefit Plans. At the same a time, health costs for midsize Michigan employers continued to rise an average of 6% this year, compared with 5.7% nationwide, the McGraw Wentworth survey found. At Pat Milliken Ford in Redford Township, 60 of the auto dealership's 110 employees have a Blue Cross policy with no deductibles or co-pays if they and their spouse undergo a yearly online health risk assessment and try to meet goals for weight, smoking, cholesterol and other measurements. The plan provides coaches who call with advice and support. "Everyone wants their premiums to be in check," office manager Bryan VanDoornik said of the incentives. "Once they get used to it, it's a little more routine." Those who refuse to get a health assessment and report on their progress on personal goals have a $1,500 yearly deductible on health care costs before insurance kicks in. "I'd say it's working well," said VanDoornik, citing both savings and health improvements in his workplace. "We've had cases where people have stopped smoking. Even some spouses stopped. The other piece of it is, you see people taking better care of themselves." Jennifer LaFrance credits her Blue Cross workplace plan with her best health in years. LaFrance, 45, mows lawns, trims trees and plows snow for the City of St. Clair Shores. A former high school and college softball and volleyball player, she began to exercise seriously on Memorial Day 2011, after watching 10 seasons of the "Biggest Loser" while eating gallons of ice cream, she said. She lost 40 pounds through an online weight-loss program that sent her e-mails with eating and nutrition tips. She also stopped smoking and started a daily power walk. She gave up red meat and switched to whole grains. "You need to take time for yourself, concentrate on goals," LaFrance said. "It's more a personal thing. I didn't do this for Blue Cross or the City of St. Clair Shores." She said she hopes the city stays with its current plan, rather than move to one that charges higher monthly rates or monthly surcharges on smokers and others. "I think that's going too far," she said. "If you are trying to do the best you can," that should be enough, she said. Experts urge caution Until now, health insurers have tried to encourage good health habits with cash prizes, free pedometers, gift cards and other freebies. But without broader support and year-round programs, the efforts too often amount to "wellness-lite," said Southfield benefits specialist Joel Clark, CEO of the J.S. Clark benefits consulting firm. Dee Edington, a nationally recognized researcher at the University of Michigan and consultant on workplace wellness issues, worries that too many companies will rush to add penalty provisions to health insurance policies that are still unproven as a cost-saver and health improvement motivator. Edington said companies are "going to jump on the bandwagon, and they will end up disappointed." Improving health is more complicated than setting up programs to reward the right behaviors, he said. "People can be paid to lose weight ... but then they go back into the same environment" where they fail without the help and resources they need, he said. Last month, a coalition of leading heart, cancer, diabetes and other groups issued guidelines to help employers and insurance companies write policies that encourage participation in wellness plans without discriminating against people with chronic diseases. "The goal of a wellness program should be to empower and enable the individual to improve their health and well-being," said Dr. Ron Loeppke, president-elect of the American College of Occupational and Environmental Medicine, which published the guidelines in its July 13 journal. "It shouldn't be used to determine a person's ability to maintain health insurance." The group's primary suggestion is that companies need to develop a corporate culture of wellness that encourages healthy habits year-round. Loeppke pointed to Dow as a model. Dr. A. Mark Fendrick, co-director of the University of Michigan Center for Value-Based Insurance Design, said that penalties need to be introduced gradually and never should be so large that they discourage people from getting care. "I'm not afraid to use sticks, but it's important first to use carrots," Fendrick added. Chrysler, GM and the City of St. Clair Shores, all of which offer Blue Cross policies using rewards and some penalties, said that for now, they prefer an approach using mostly incentives. "It's a transformation," said Diane Neal, Chrysler's health care and disability director. "You want to walk before you run." The company hopes to convey the importance of good health through year-round activities and programs. '"Improving health is an organizational priority," Neal said. "It's been easy for employers, in the past, to have treated health care as an expense. We feel it's time to change that and look at health care as an investment, not a cost center." GM's Marsha Manning, manager of health care initiatives, employee benefits and public policy, said the company will continue to explore ways to improve employee health and control costs. Some day, it may ask spouses to participate in health tests and programs, she said. "The goal is to keep raising the bar to get people more engaged in their health," Manning said. Contact Patricia Anstett: 313-222-5021 or panstett@freepress.com