Heath Care Plans

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One of the biggest human resource issues facing businesses today is the skyrocketing cost of health insurance.

All employers want to provide comprehensive health insurance benefits for their employees. An attractive benefits package is an asset to any business and a necessity for most individuals. Companies can even attract and retain employees by offering reasonable premiums.

However, the cost of health insurance is increasing at staggering rates. Companies that previously paid 100% of the cost are now being forced to cover only a percentage, leaving the remainder for the employee. And that percentage left for the employee is increasing as many companies are paying less and less of the cost.

In 2007, employer health insurance premiums increased by 6.1 percent - two times the rate of inflation. The annual premium for an employer health plan covering a family of four averaged nearly $12,100. The annual premium for single coverage averaged over $4,400[1].

The cost of family health insurance nationwide is increasing dramatically for employees without anywhere near an equivalent increase in family income. If this trend continues, more workers are likely to become uninsured because of the expense.

One of the reasons for the increase in health insurance is of course employee health. Group health insurance providers base their premiums on the overall health of the group – the average cost of claims paid. In a plan year, if the insurer has paid a large number of high dollar claims, they will adjust their rates accordingly for the next plan year. Therefore, the more claims the higher the rates. Employees with serious health conditions can affect their more healthy co-workers by raising the cost of health insurance and health care in general.

Obesity in America is an increasing health issue. However, it is not obesity alone that affects the cost of health insurance but it is the wide range of health problem which often accompany a medical condition of this type. Obesity has been linked to other illnesses such as certain cancers, cardiovascular diseases and diabetes. A company with a largely obese population is at a higher risk of having increasing health insurance claims.

Smoking also contributes to the high cost of health insurance. Smokers are at a higher risk of developing cancer in the lung, pharynx, larynx, esophagus and other respiratory areas. However, unlike obesity, some health insurance providers offer lower rates for non-smokers. Although the cost of health insurance in general is still affected by claims paid for smoking related illnesses, non-smokers can be rewarded by not paying the same premiums as smokers. The down side is this option is not offered by all insurers.

To combat these employee health concerns, many employers are implementing wellness programs. These programs are designed to increase employee awareness of certain health issues and offer solutions to lowering one’s risk of having these problems or assisting to manage or eliminate them. Wellness programs vary but the main goal is to improve employee health and hopefully maintain and/or decrease health insurance premiums.

Fitness through healthy eating habits and exercise is one target of the wellness program. Many companies offer discounts for gym memberships, weight loss programs and smoking cessation tools or counseling. Employers may even provide these benefits free of charge. For some companies, the savings in health insurance premiums over time can outweigh the cost of assisting employees in managing their health concerns. Some health insurance providers even offer lower rates to companies who have a wellness program in place.

Promoting wellness programs can have substantial impact on profitability by reducing health care costs, increasing productivity, decreasing absenteeism and providing a positive, healthy work environment. Wellness programs are one of the few employee benefits that can pay money...
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