The benefits of having a wellness program at your company are well known; getting your employees to watch their weight or quit smoking is definitely a good thing for both you and them. Your insurance company also benefits, since fewer unhealthy employees means fewer payouts.
However, if your insurance company is administering your wellness program, that could affect your premiums. Here’s how. Typically, most wellness programs require all participants to fill out a health-risk assessment (HRA) questionnaire that asks anything from the presence of pre-existing conditions and smoking habits to what kind of car a participant drives.
The data from that HRA is then aggregated to come up with average risk factors for the company as a whole. For example, if the average weight of a company’s employees is 240 pounds, the insurance company might use that data to suggest that there could be a higher risk, on average, for diabetes and then raise the company’s premiums at renewal time.
According to John Bates, president of wellness program consultancy Wellness Proposals, in Winston-Salem, N.C., if your insurance company is administering your wellness program, you should just assume that your premium will go up next year. “Your insurance company may entice you with a 2% discount on your initial premium,” he explains. “But you might get a 15% increase because the data they collected increased your risk adjustment factor.”
If the HRA data says all your staff are super healthy, your premium could actually be reduced. But with obesity almost an epidemic in the U.S., that’s unlikely.
Alternatively, you can have someone in-house oversee your wellness program, or hire a third-party administrator to do so. But if the program is administered by your insurance company, get in writing how it will use the data it collects. “If more companies push that issue,” Bates says, “it will force the insurance industry to reveal what it’s doing with that information and, hopefully, keep it separate.”
—Mark A. Newman, senior editor, REMODELING.
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