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Employers Preparing to Expand Wellness Efforts, Survey Finds

May 26, 2010
Related Topics: Benefit Design and Communication, Health and Wellness, Latest News
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The costs of the health care reform law make it more important than ever that employers keep their workers healthy and motivated to adopt healthy lifestyles, a vast majority of employers said in a recent survey.

Not only did 78 percent of employers agree or somewhat agree with that statement, but most also said they are likely or very likely to create or expand corporate wellness programs as a result of an incentive provision in the new law.

Effective January 1, 2014, employers will be able to use employee wellness program rewards or penalties of up to 30 percent of the cost of individual health coverage, up from the current limit of 20 percent.

The survey conducted by the Chicago-based Midwest Business Group on Health in partnership with Business Insurance, found that 60 percent of employers are likely or very likely to create or expand their wellness programs as a result of the wellness provision, while 33 percent said they are unlikely or not very likely to do so, and 7 percent did not answer.

The survey of 1,300 employers, including MBGH members and the National Business Coalition on Health, gauged their intentions and perspectives concerning the Patient Protection and Affordable Care Act.

MBGH will present the survey findings this week at a health care seminar in Chicago.

Larry S. Boress, president and chief executive of MBGH, said the most significant finding of the survey is the recognition among employers of how critical the health of their employees is to the success of their companies.

“Employers have recognized that under health reform, more than ever, the investment in human capital is what they need to be looking at as opposed to thinking of benefits as just an expense of doing business,” Boress said.

The survey also found that when it comes to communicating information to employees, 52 percent are educating employees about how the law affects their benefits; 36 percent are describing what they, as the employer, plan to do; and 35 percent are explaining to employees what’s contained in the new law.

Conversely, 38 percent of the employers surveyed said they haven’t decided what to communicate to employees and 6 percent said they don’t plan to inform employees about the law.

Boress said he was not surprised by the lack of communication by employers.

“There’s so much confusion and uncertainty about what, in fact, is going on in health care and what do these rules really mean and how it’s all going to play out,” he said.

Employees are “running scared,” he said. “They don’t know if they’re going to have benefits” in the future. “In the immediate case ... I think employers have an obligation to tell people what they know [about the law] and what they don’t know and start with that.”

Among other findings from the survey, “Employers Intentions and Perspective of the New Health Reform Law,” were:

• Fifty-four percent of employers said it is unlikely or not very likely that they will drop health care coverage and pay the $2,000 per employee fine as stipulated under the law. However, 18 percent said it is likely or very likely that they will consider dropping benefits.

• Employers were split as to whether they are likely to charge more for dependents as a result of a provision that extends coverage to adult children up to age 26. Forty-seven percent said they were likely or very likely to charge more for coverage, and 47 percent said they were not very likely or were unlikely to charge more.

• Seventy-four percent of employers said they were not very likely or were unlikely to reduce the number of employees working 30 to 40 hours a week as a result of the law’s requirement that they extend health care coverage to employees who work 30 or more hours a week or face penalties.

• Fifty-five percent agreed it is likely or very likely that employees will have more out-of-pocket costs or reduce their health care usage due to a $2,500 cap on employees’ annual contributions to flexible spending accounts that goes into effect in 2013. There is no limit currently, but employers typically impose limits between $4,000 and $5,000. Twenty-eight percent said the provision is not very likely or unlikely to cause employees to spend more, while 17 percent did not answer.

For more information, visit www.mbgh.org.

Filed by Sally Roberts of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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