The new focus on prevention and wellness

By Tammy Steele

Employers are the primary source of healthcare coverage for most individuals in the US, and offer a significant opportunity to influence the health and behaviors of the nation’s workforce. However, this opportunity also brings great challenges for employers as they begin to navigate the new healthcare landscape.

The new healthcare act, which is set to be implemented in multiple phases during the next 10 years, requires employers to extend health insurance benefits to their entire workforce, limits the portion of costs employees may pay for coverage, restricts the amount of costs an employer can pass along to employees, and requires employers to offer a certain level of coverage to all employees (such as eliminating annual and lifetime benefit maximums and pre-existing condition restrictions). As these elements begin to take shape and create a new healthcare landscape, employers face a greater burden to make the program successful, while navigating through the complicated measures and incurring more cost for employee coverage.

Long before the issue of healthcare reform became a reality, employers were seeking ways to lower their ever-increasing healthcare costs without cutting coverage. According to the Kaiser Family Foundation, employer healthcare costs have continued to rise at a substantial pace for the past decade, increasing a total of 114 percent - nearly four times the rate of inflation. Faced with the new (financial) requirements of the healthcare act and continued increases in the cost of employee health care coverage, more companies are turning to comprehensive health and wellness programs to offset costs and improve the health of employees.

Comprehensive wellness and preventive care programs have become an important asset for employers, as a way to enhance an existing health benefit plan, or bring cost-saving primary and wellness care directly to employees, at a lower cost. Beginning with acute care services like treatment for colds and allergies, sprains and strains, and other common health issues, the comprehensive wellness program also focuses heavily on preventive care elements that include annual physicals, screenings, and vaccinations. The new health care law requires (in-network) preventive care services to be offered at no cost to individuals, which makes comprehensive wellness programs a savings for employees and employers.

These programs can also incorporate health risk assessments, health improvement plans and coaching, tobacco cessation programs, and participation tracking. Depending upon the needs, size and investment of the company, comprehensive wellness programs can be delivered locally and/or implemented at the workplace.

Independent research has shown that wellness programs can provide companies a return of up to $6 per person for every $1 invested. This rate of return was even noted by the Congressional Budget Office, which recently stated that the effects of preventive care as part of the new healthcare laws may offer greater, unknown cost savings that may offset a portion of the act's nearly $1 trillion cost. And in sharp contrast to the regulations and requirements from the new healthcare laws, wellness and prevention is one area where companies may get assistance. Employers of all sizes may be eligible for federal credits to implement wellness programs according to the new laws.

In spite of the success and the cost savings, comprehensive wellness programs may still be cost-prohibitive for small employers, who will be required to offer the same level of coverage as major corporations. To help small employers meet the required levels, many of which have yet to be defined by the US Health and Human Services Department, several insurance companies are revamping plans to be more attractive to small businesses. In response to the growing need, many providers and insurance organizations are also developing smaller-scale wellness programs, to be made available to small businesses and individuals through national medical centers.

For now, the cost and impact for employers to navigate through the new healthcare landscape is largely unknown, and will be determined as more of the specific rules and codes of the legislation are written by the Department of Health and Human Services. The next significant phase of the new health care laws will go into effect in early 2011. In the interim, employers (and employees) anxiously await new challenges and opportunities that will change the healthcare landscape.

Biography

Tammy Steele is Senior Vice President of Human Resources for Concentra, a national health and wellness company that provides custom and comprehensive healthcare programs direct to employees through workplace health centers, on-site events, medical mobile units and more.