Two Questions

The second most frequently asked question of an insurance agent is, “Why did my policy lapse?” The answer is because you didn’t pay the bill. The absolute winner, the question that I am asked at least once a day is, “Why did my rates go up?” There isn’t a simple answer to that question.

Some of the factors that may contribute to a premium increase for an employer are:
* Increased Utilization
* Aging Population
* More Mandated Benefits
* Medical Inflation
* New Insurance Taxes

That is not a complete list. There are more. But today’s post isn’t about price increases. It is about one of the ways to impact costs.

The May 2011 edition of Employee Benefit Adviser, which is not nearly as boring as it sounds, included an article about two employers enjoying 0% renewals this year. We are going to look, briefly, at J. J. Keller & Associates, Inc. of Neenah, Wisconsin.

J. J. Keller & Associates, Inc. is a privately held company with about 1,100 employees. Keller helps companies navigate through the minefields of government regulations. The company enjoys a stable workplace environment. 60% of the employees are over age 40 and the majority have worked for the company for five years or more.

Keller’s commitment to Wellness includes:
* Company sponsored Weight Watchers at Work
* Smoking Cessation programs
* Fitness Challenges
* A Walking Trail available during breaks
* In-house Food Service
* Workout Facility
* In-house Wellness Center staffed by a Nurse Practitioner

You get the idea. They have made the complete and total commitment. J. J. Keller has everything in place for a successful program. Even the fact that it isn’t a publicly traded company helps. Does this mean that the health insurance rates are going to decrease? Are they saving money?

The article doesn’t answer either of those questions. My guess is NO on both counts.

Medical inflation, alone, is going to impact costs at close to 10% per year. Maybe more. The Patient Protection and Affordable Care Act is taking a toll, too. But the most important issue is that we are not discussing machine maintenance. We are talking about human employees, flesh and blood. We are going to get sick or injured. We are going to have claims.

A properly designed Wellness Program can mitigate the type and amount of claims by controlling behavior. Ongoing claims for diabetes, heart disease, stroke and cancer are budget killers. Many of these conditions are controllable through education, medication, and behavioral modification. The Keller program is designed to improve morale and awareness. From here, today, it appears to be working.

There are some local stars in the wellness universe. Kaiser Permanente is returning to its HMO roots. After a bit of soul-searching, the company realized that it was attempting to be all things to all people. Kaiser has recently declared that it will return to its core competency – an integrated medical practice whose mission is to keep people healthy. With a focus on Prevention, Kaiser hopes to reestablish itself as a unique option in the marketplace.

I recently met with Jamie Field of University Hospitals. Ms. Field has created an incredible wellness program for Northeast Ohio employers. She and her team will conduct Health Fairs, Wellness profiles, and Health Screenings at the worksite. The pricing tells the story. U.H. has made the decision to perform community outreach. For example, $20 per employee includes on-site health screenings for:
1. Blood Pressure
2. Blood Sugar
3. Cholesterol
4. BMI
5. Bone Density

Employees who fall outside of the normal range on any of the tests are given useful information designed to answer immediate questions and to spur productive steps towards help or control.

Will this lower the employer’s group health insurance rates? No, at least not anytime soon. But if the goal is to help someone before they have a stroke, heart attack, or other major claim, then a wellness program could be very useful. And yes, it could improve employee morale.

The purpose of group health insurance is to attract and retain good people. A wellness program, one designed to help and educate, could complement your efforts.

The results may be happier employees. You may have healthier employees. But the insurance will still lapse if you don’t pay and the rates may still go up. I’m hoping just a little.

DAVE