CNN Article:  Company Wellness Programs impove health, cut costs.

Healthy habits may cut price of insurance

Senate bill offers workers incentive

By Michael Kranish, Globe Staff  |  July 15, 2009

Workers who quit smoking, lose weight, and eat right could have their health insurance premiums cut by as much as half, possibly saving them thousands of dollars per year, under a measure inserted with little notice this week into the Senate healthcare overhaul bill.  The move represents a potential breakthrough on one of the most controversial elements of healthcare overhaul: how to get Americans to improve their well-being without turning government into a medical version of Big Brother.  Under the plan, individuals would have a strong financial incentive for jumping on a treadmill or signing up for smoking cessation classes, moves that would not only prolong their lives but also reduce the financial burdens of behavior-related disease on the healthcare system.  “Money talks,’’ Senator Judd Gregg, the New Hampshire Republican who helped broker the deal reached Monday night, said in an interview. “People react to incentives that involve cash.’’  The supermarket chain Safeway and some other companies – including, in Massachusetts, EMC Corp. – have developed these programs on their own. But such plans have not become widespread nationally.  The bipartisan agreement by members of the Senate health committee could still unravel as the bill makes it way through other committees in the Senate and House. But after months of focus on how to provide coverage to the uninsured, it represents a stark acknowledgment by senators that overhauling the nation’s healthcare system must include measures to make Americans more health-conscious.

Previous measures aimed at convincing Americans to get in shape and lead healthier lifestyles have had mixed success. While the smoking rate has dropped dramatically in recent decades, the obesity rate has doubled since 1987, according to Ken Thorpe, a professor of health policy at Emory University. If the country could return obesity levels to the 1987 rate, it could save $225 billion per year, going a long way to paying for other measures in the healthcare bill, Thorpe said.  “To date, the Congress just has not dealt with this,’’ said Thorpe, who was a senior health policy aide during the Clinton administration.

Under existing federal law, companies that offer group health insurance can offer a maximum 20 percent discount to employees who can show they have taken steps to improve their health. The new measure would raise that discount to 30 percent and enable the Obama administration to raise it to 50 percent.

The measure could have the most impact at larger companies that are self-insured or provide insurance through a private company, and would likely have less impact at small businesses or those with limited health plans, analysts said.  EMC, the Massachusetts-based data storage company, gives a 12 percent discount, amounting to $300 on an annual family plan, to employees who take a health risk assessment. Sessions with a “lifestyle coach’’ to improve health are available on a voluntary basis. EMC says it does not require employees to prove that they have accomplished health goals. Instead, it focuses on an educational approach that it believes will pay off in the long term.  “It is about driving partnership, not strong-arming anyone to do anything,’’ said EMC benefits director Delia Vetter. About 90 percent of the company’s US workers participate. A stricter incentive program is run by Safeway Inc., the grocery chain. It gives discounts to those of its 30,000 nonunion employees who demonstrate they already meet certain health measures, or show they have quit smoking, lost weight, or taken other steps to get healthier, according to the company’s vice president for health initiatives, Ken Shachmut. About 74 percent of the eligible workers participate. Under a family plan, the savings can be as much as $1,560 per year, according to Safeway.  If the Senate provision passes and the company could raise the discounts to 50 percent, families would save more than $3,000 a year, Shachmut said.  The company said its plan enabled it to cut nonunion healthcare costs by 13 percent in 2006, when the program took effect, and has kept costs relatively flat since then. A union version of the program is in the works. Safeway’s program has been widely hailed. In May, President Obama praised “companies like Safeway that have been able to hold their costs flat for their employees at a time when other companies are seeing double-digit inflation in their healthcare.’’ Obama cited benefits to employees “as a consequence of them stopping smoking or losing weight or getting exercise.’’

Senate Republicans recently said the legislation initially written by Democrats on the health committee could have eliminated the ability to provide the 20 percent discounts for healthy behavior. “The bill that Democrats are now pushing through the Senate would actually ban this successful program from being copied and implemented by other companies,’’ Senate Republican Leader Mitch McConnell of Kentucky said recently. On Monday, the Globe asked a spokesman for Senator Christopher Dodd of Connecticut, who is handling the issue for Democrats, whether McConnell was correct in saying the legislation would ban the program. Several hours later, in what Dodd’s office said was a coincidence, senators announced they had reached an agreement that allowed the discounts and expanded them to as much as 50 percent.  Democrats said they were never trying to ban the discounts, but wanted to make sure that individuals who had certain kinds of health problems were not discriminated against. As a result, the revised legislation says that the wellness programs cannot be “overly burdensome’’ or be “a subterfuge for discriminating’’ based on a person’s health.

Dodd said yesterday that the legislation would give employers “greater flexibility to provide their employees with premium discounts for participating in wellness programs. It will help Americans become healthier, avoid illness, and reduce healthcare costs to individuals, businesses, and the government.’’

Health care cost are spiraling out of control and researchers estimate, “75% of all healthcare cost directly stem from preventable chronic health conditions, yet only 1% of the 1.9 trillion dollars spent on health care in the United States is devoted to protecting health and preventing illness and injury” (Campbell & Lanza, 2006). Rising health care costs not only have an impact on individuals, but on employers too.

The Healthy Workforce Act

Senators Harkin and Smith introduced the Healthy Workforce Act (S. 1753) to assist businesses in their health promotion efforts while providing incentives to offer onsite health promotion programs. The legislation is targeted primarily at smaller and mid-sized companies, who would otherwise have difficulty making the initial investment needed to support such programs. The Healthy Workforce Act provides a tax credit for 50% of the cost of a qualified employer health promotion program, up to $200/employee for the first 200 employees and $100/employee for remaining employees. The credit is conveyed through income tax credit with for profit employers and through payroll tax with tax exempt employers.

Why become a grassroots advocate/endorser?

There are many benefits to becoming a grassroots advocate/endorser. Becoming an advocate/endorser of this bill will allow you to grow your professional skills by learning about and engaging in political advocacy. In addition, helping health promotion advocates’ pass Senator Harkin’s Healthy Workforce Act (S.1754), you will be a part of the movement to put health promotion on the national agenda. If this bill passes, the health promotion industry will grow and strengthen significantly. For more information please contact Leah Tiller at ltiller@higginbotham.net or visit www.healthpromotionadvocates.org

You can now download the pre-application form for the 2009 Champions in Health Award.

The Award Ceremony will be held on November 5th, 2009. The location is still being determined but will be posted as soon as a decision is made. The Guest Speaker this year will be Todd Whitthorne, President and CEO of Cooper Concepts. We are thrilled to welcome Todd to the Champions in Health program and know that you will enjoy hearing what he has to say about the workplace’s role in risk management and health promotion.

Pre-Application Download

Centers for Disease Control and Prevention – http://www.cdc.gov/cleanhands/
The CDC provides information and research on hand sanitation along with links to helpful tips for proper hand washing.

Kids Health – http://www.kidshealth.org/parent/general/sick/hand_washing.html

Kids Health is a project of Nemours. Nemours also creates high-impact educational projects that positively affect the health of children. These projects are developed through the Nemours Center for Children’s Health Media, a part of Nemours completely dedicated to this task. The Center creates award-winning, family-friendly health information in a number of formats, including print, video, and online.