Employers profit from healthy employees. Employees benefit, too, so a program that helps employees improve and prolong their health is a win-win solution.

How do employers profit?

• Healthy employees keep group health insurance premiums down.
• Healthy employees work more days per year, increasing potential revenues to the employer.
• The day-to-day productivity and creativity of healthy employees are higher than if those same employees were chronically ill, adding more revenue potential.
• Chronically ill employees who show up sick for work are more likely to make costly mistakes and reduce daily productivity.  

Measuring the true costs of sick employees is difficult, but that should not deter employers from exploring the potential of healthier employees.

Since employers profit from healthy employees, what can employers do to encourage employees to improve and to prolong their health? What options are available to an employer who wants to offer such encouragement? And how much of health-improvement out-of-pocket expenses should an employer defray?

Traditional health insurance covers a portion of out-of-pocket sickness expenses, but provides little encouragement and few incentives to be healthy. As a result, the expenses of maintaining good health are borne entirely by the individual, unless a far-sighted employer offers to bear some of them.

Employers who provide their employees with traditional health insurance face ever-increasing premiums. According to the non-profit consumer advocate, Families USA, Texas health care insurance premiums rose 86.8 percent from 2000 to 2007. In 2000, the average family health insurance premium was $6,638. In 2007, that same coverage cost $12,403. In the same time period, median earnings rose just 15 percent, from $23,082 to $26,484. The costs of health care benefits rose from 28.7 percent of the employee’s wages and salary to 46.8 percent.

To employers, the options for traditional health care are troubling. They can pay all of the increase, shift more of the premium costs to the employees, switch insurance providers each year, increase deductibles and copays, reduce coverage, or discontinue health insurance coverage altogether.  This is the environment for all businesses, both large and small.

On top of that, the small business owner has weak negotiating power with insurance providers.  Increasing premiums have forced many small business owners to abandon health insurance coverage. According to the Kaiser Family Foundation, 59 percent of small businesses in the United States did not provide health care benefits to their employees in 2006. In Texas, the rate was 68 percent. Of course, offering no health care benefits seriously affects the ability of business owners to hire and keep quality long-term employees.

What options do small business owners have? The option that makes the most sense to me is to “develop” employees who rarely get sick. Most people are unknowingly setting themselves up for costly chronic disorders. With appropriate employee education, guidance, and encouragement, business owners can help their healthy employees prolong their good health and help their chronically sick employees become healthier.

Traditional wellness programs offered through conventional healthcare insurance include:

• Weight loss programs,
• Gym membership discounts or on-site exercise facilities,
• Smoking cessation programs,
• Personal health coaching,
• Classes in nutrition or healthy living,
• Web-based resources for healthy living, and
• Wellness newsletter.

In subsequent blogs, I will address effective health-improvement programs that go well beyond those listed above. Developmental programs in the greater Houston (Texas) area have shown very encouraging results. It appears that these programs, if adopted by employers, or even individuals, will hold down long-term health insurance costs and improve the long-term health of their employees.

If you would like to explore these programs for you or your business, send me an e-mail at earlkemper@iib.ws.