When MasterBrand Cabinets Inc. launched its wellness incentives program, some employees feared it would resemble life insurance—using pre-existing conditions as a reason to deny coverage.
By establishing health benchmarks to mete out rewards, the program was viewed as "a way to bar people that did have health risks from getting insurance," says Robert Jacobs, executive vice president of human resources at the cabinet manufacturer based in Jasper, Indiana. "We don't want to bar anyone from health insurance."
Rather than curtailing health care, the company's goal was to improve health with the program it launched three years ago. "We were on the way of creating a culture of wellness in the organization," Jacobs says.
The company had been struggling with double-digit inflation in health care costs when it began working with Bravo Wellness in Cleveland to establish the program.
MasterBrand introduced the concept to its 8,500 employees at 14 North American plants more than a half-year in advance, holding plant-floor meetings and brown-bag lunches. Those in good health generally supported the plan, while those with health risks thought the program could be intrusive, Jacobs says.
Some minds were changed when MasterBrand encouraged employees to get physicals and footed the bill. About a half-dozen employees learned they had serious health issues, such as heart problems and undiagnosed diabetes, Jacobs says.
Employees are screened for blood pressure, low-density lipoprotein, or LDL, cholesterol; body mass index, or BMI; and smoking. They receive up to six points for meeting certain standards—two points each for BMI and not smoking, and one each for normal blood pressure and LDL cholesterol numbers.
Rewards and penalties are based on the number of points an employee receives. Someone who meets all six criteria receives a $2-a-week incentive in the form of an insurance premium discount. On the other extreme, someone with less than four points pays a $10-per-week penalty.
"About $50 a month is enough to catch someone's attention," Jacobs says.
An appeals process allows someone with health issues to opt out or aim for an alternative target. So if an employee is making progress toward reducing BMI, or is on cholesterol medication, that worker can be viewed as meeting that criterion.
With the incentive program, MasterBrand has saved an average of $124 per employee, per year, in health care costs.
Affinia Group Inc., which designs, manufactures and distributes industrial products, also had been overwhelmed as health care costs skyrocketed 25 percent per year before it introduced wellness incentives nearly a decade ago, says Bob Soroosh, director of benefit administration. Both he and Jacobs were involved in drafting the consensus statement on wellness programs.
The Ann Arbor, Michigan-based company initially offered incentives just for completing health assessments. The company gradually ramped up its program, and working with StayWell Health Management, now provides rewards for health outcomes.
With the 2011 health screening, for instance, an employee and his or her spouse could have received a contribution of up to $400 into their health reimbursement account, or HRA, in January 2012 if they didn't smoke and hit BMI and blood-pressure targets. The HRA contribution offset an increase in the health plan's deductible, Soroosh says.
Someone with health issues can fulfill an alternative, such as receiving weight-loss coaching from StayWell, and still receive the reward.
Rewards also are available for doing things like taking part in Weight Watchers and getting a colonoscopy.
Since implementing the program in 2003, the compounded annual growth rate in health insurance claims has been just 2.1 percent per year, Soroosh says, rising from $7,576 in 2003 to $8,936 this year.
For companies considering such programs, it's even more important to create a wellness culture, Jacobs says. "If you're doing it just to attack claims, don't do it. It won't succeed."
Susan Ladika is a writer based in Tampa, Florida. Comment below or email email@example.com.