Employee engagement is a hot topic these days, and with good reason. When you don’t have all hands on deck rowing in the same direction – or worse, if some of your employees are content to simply drag their oars in the surf – it’s hard to run a tight ship.
But salary is rarely an employer’s only employee-related expense, and having employees who are disengaged with regard to their own health care can be just as pernicious, if not more so.
A recent survey conducted by Aon Hewitt, a human resource consulting firm, shows just how wide the disconnect between employees’ health and their perception of it can sometimes be. The survey also found that employees often vastly underestimate employers’ contribution to their insurance premiums.
Among the findings of Aon Hewitt’s latest Consumer Health Mindset Survey:
- A vast majority (87%) of employees covered by their employers’ health plans say their health is good, and just 23% say they are overweight or obese. However, a full 53% of those employees who said they were in good health reported a body mass index that indicated they were actually overweight or obese.
- Another Aon Hewitt analysis put the total cost of health care per employee at $10,522, and employers’ share of that cost was $8,318. However, the Consumer Health Mindset survey showed that employees typically estimate that the employer contribution is about half the actual figure.
With that large of a knowledge gap, it’s perhaps not surprising that health care costs have exploded in recent years. Indeed, says Patrick Georgia, senior vice president and Wisconsin health and benefit practice leader for Aon Risk Solutions in Green Bay, bridging that gap is the vital first step in getting a handle on costs.
“I think it comes down to good communication,” said Georgia. “Finding an opportunity to really have a candid conversation with one’s employees is probably the important next stage of trying to control health costs.”
But while it’s easy to see how having a more thorough understanding of one’s health is crucial to keeping costs down (everyone wants healthy employees, after all, and every employee would prefer to be healthy, so everyone’s on the same page), some might be skeptical about whether having an understanding of health costs can be an important factor in reducing those costs.
“I think it is, and let me give you an example of where we’ve come from as an industry,” said Georgia. “About a decade ago, the typical situation in a health plan was someone had a deductible that was relatively small in terms of total cost of health care, so an employee would meet the deductible level, whether that was $250 or $500, and then once the deductible was met, pretty much everything else was paid for by the health plan. The problem with that style of plan was there was no commitment by anyone to keep the costs down because once you achieved the deductible, you felt like you had an open credit card to spend in any manner that you needed.
“The transition over the last decade has been to consumer-directed or high-deductible health plans, which has caused the employee using the plan to be a little more conscious of what they spent their money on. … They were a shared partner in this spending.”
Indeed, the growing shift toward account-based, or consumer-driven, health plans has created a bit more transparency when it comes to health care costs. Such plans tend to have high deductibles and lower premiums, and according to Georgia, they’re more likely to get employees to take an active role in managing their use of health care.
“What we have found is by encouraging through these plans the employees to be more aware of where health care is being spent, it’s no longer just the responsibility of the human resources department or the company itself to make sure it’s being done properly,” said Georgia.
According to Aon Hewitt’s survey, employees are responding positively to such measures, despite the higher out-of-pocket expenses they create.
The Consumer Health Mindset survey found that 78% of employees enrolled in account-based plans are satisfied with them.
Keeping tabs
Aside from having a better understanding of their health care spending, knowing where they stand health-wise is another key element to controlling costs (and keeping valuable employees healthy and alive).
With regard to health and wellness programs, the survey found the following:
- Sixty-three percent of employees surveyed said they would complete a health risk questionnaire for a monetary reward.
- Sixty-two percent said they would participate in a healthy eating or weight management program.
- Forty-eight percent said they would participate in a medically sponsored program to help manage a health condition.
- Of the workers who were offered a health-risk questionnaire and were given action steps to take, 86% took some action.
The key, says Georgia, is getting the ball rolling so that employees can begin to get a more complete picture of their health situation.
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“If employees are unaware of what they might potentially face, they will continue to follow the same path that they have in the past, and if it’s unhealthy, they won’t take any action to make any changes,” said Georgia. “For me specifically, I didn’t know that my hereditary situation [showed a risk for] high cholesterol until I went through my first health risk questionnaire and blood test to determine what was going on with me personally.
“When I found that I had high cholesterol, I was able to take that information to my doctor and develop a strategy to not only get me healthier but potentially help me live longer and help my company avoid a large-case event because I was aware of the situation. Under the old plan a decade or two ago, I might have never known that and ended up having a large-case event or, in the worst case, becoming a fatality because I didn’t bother to know what was specifically going on in my situation.”
Of course, the big question for employers as the Affordable Care Act continues to work its way toward full implementation is whether they should continue to offer their employees coverage beginning in 2014 or allow them to go into health insurance exchanges, paying a federal penalty (if they have 50 or more employees) in the bargain.
While punting on the issue might seem the easiest course, Georgia cautions that staying in the health and wellness business may be the wisest move.
“I think [companies] can continue to have more influence over the health and wellness of their employees, number one,” said Georgia. “Two, I think that from a recruiting standpoint for new employees and a retention standpoint of current employees, they have a much better chance at keeping someone in the family if they are offering benefits – if they’re not just sending everybody to the exchange.”
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