Healthier Lifestyles Result In Lower Health Insurance Costs

Category: Finance, Insurance.

Health Risk Assessments( HRA s) have been around for many years.

Today the HRA is becoming a more common way that employers are providing a resource for employees to get a health evaluation and health report on their overall health status and wellness status. Physicians ask you questions and maintain data on your overall health so that they can provide appropriate care based upon one s health history and current medical conditions. Why HRA s are important? Employees voluntarily participate in an HRA to evaluate their health status. HRA s have increasingly become an important tool for employers to use as health care inflation has continued to rise at a prohibitive pace. Participation in the HRA will give the employer a strategy to help their employees to manage their personal health situation. As an example, a fictitious large employer with 500 employees offers an HRA to its employees.

Though HRA information is private to comply with HIPAA, employers use HRA data to address problem areas in the overall health care claims. In exchange for participating in the HRA, employees will receive a discount on their contribution towards health insurance. The company that administers the HRA on behalf of the employer provides reporting to the employer that reflects three trends: 14% of the employees or dependents have mild or elevated hypertension. 25% of the work force uses tobacco with 5 ongoing cancer cases. Due to the discount on contributions and Healthy Hearts campaign by the Human Resources department, the employer ends up with 71% of employees participating in the HRA. Type 2 diabetes impacts 11% of the HRA respondents or their family members. Participants in the HRA will continue to get a discount on premiums for the health insurance. The employer is partially self- insured and works with their third- party administrator( TPA) to analyze their claims to assess the overall health care costs and identify each of above items relative to overall claims expenses.

Through the aggregate report provided to the employer, the company implements an educational program that provides information regarding diseases to the HRA participants. The company recognizes that the investments made in the HRA implementation and wellness program are long- term. Smoking cessation programs are offered to employees and dependents. The company will now sponsor preventive health programs and reward all participating employees who receive preventive health screenings with a reduction in their insurance premiums. What is the return on investment? Employees who opt out of the HRA or preventive health screenings will pay a higher premium for health insurance. The implementation of an HRA through a wellness program will require staffing and financial investment by the company.

However, the company will yield a positive return on these investments in reducing absenteeism, increasing productivity and lowering overall health care expenditures. In addition, the employees will be going through the HRA screenings on company time thus impacting productivity for a short time. For every dollar invested, a company may expect to get a return of between the dollar invested and six dollars returned. Health Risk Assessments or Personal Wellness Profiles help individuals evaluate their lifestyle, identify health risks and decide how to improve their lifestyle. Each company will vary in their results based upon the scope of the wellness program. Employers are increasingly using HRA s to financially entice employees to improve their health status.

Healthier lifestyles result in lower health insurance costs. Through reduced insurance premium costs and other incentives, employers are seeking to lower health care costs by getting to the real root of the problem: good health is not an accident it is a choice based on a healthy lifestyle. With health care inflation continue to far outpace the CPI, the investments made in implementing an HRA through a wellness program will help your company lower health care costs and absenteeism while increasing productivity.

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