Your Company's Next Health Plan: Drop the Doughnut
You want to please the boss? Put down the doughnut.
If there was any doubt that the Scotch-and-a-smoke days of "Mad Men" corporate culture are over, a new survey draws a picture of the brave new world of Obamacare, in which large companies are rewarding employees for lowering their cholesterol and submitting to monitoring from a "primary nurse case manager."
Companies started building gyms and banning smoking on corporate campuses years ago, but their demands now go beyond getting on the treadmill or cutting out cigarettes. According to the survey by the consulting group Towers Watson, more than a third of employers penalize workers for not meeting health requirements, or plan to by next year. Some 80 percent plan to affect changes using rewards of up to $400 annually.
You might want to tell your significant other to drop the doughnut, too: Sixty percent of companies said they will extend such incentives to spouses.
The survey of 538 midsize to large companies was conducted from November to January.
Measures aimed at reducing the per-employee cost of providing benefits coincide with slowing growth in health coverage expenses. Employers expect the average active employee to cost $12,136 this year. That's up 5.1 percent but is the lowest rise since the late 1990s.
Companies have controlled costs largely by pushing some of them onto workers. Employee health care contributions have climbed faster than those of employers in the past five years and are approaching 40 percent of the total cost, including premiums and co-pays.
But with salaries increasing slowly, there is a limit to what workers can handle, leaving benefits administrators searching for ways to reduce costs by keeping employees from needing health care in the first place.
The survey found that corporations are also expecting more from providers: Forty-seven percent of respondents said they are or would soon tie payments to performance.
There's something to be said, of course, for your employer encouraging a healthier, happier you, whatever its motives. For younger workers at the upper end of the ladder, the next few years of rapid change will mean, at worst, paying closer attention to the options being offered.
Besides watching your waistline and potato chip consumption, you'll have to deal with tighter rules about whether your spouse's or your insurance pays for doctor visits. (You also may soon have to pay a higher premium for including your dependents at all on your plan.)
The picture is muddier for retirees and lower-wage workers, thanks to the health exchanges that were included in the Affordable Care Act of 2010 but don't go into effect until next year.
Though the exchanges were designed to provide low-cost options and subsidies for people whose employers don't offer it or who can't otherwise afford it, companies are watching to see how they develop. A third of respondents told Towers Watson they view the exchanges as a possible solution for retired workers, and that percentage is expected to rise as the exchanges become active.
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Lower-wage workers, even those on their company's plan, also may find themselves being off-loaded onto exchanges.
"Some employers will be eliminating part-time coverage or structuring their plans to make the employer plan 'unaffordable' under the law so that low-wage workers can access the subsidies," said Randall Abbott, a senior health care consulting leader at Towers Watson.
As health benefits become an increasingly precious commodity, they are evolving into "a proposition that attracts, retains and motivates employees," according to the Towers Watson report—and not a standard slate of goodies that automatically comes with the job. What kind of benefits you get may become the best sign of how much a company values you.
Think about that the next time you get up to make the doughnuts.