April 3, 2012
Employers Tie Premium Costs to Employee’s Health
In a 2009 RetailWire poll, the majority of respondents (53 percent) were against employers being able to mandate medical tests or changes in behavior as a requirement for being on their company health insurance plan. Many employers, it appears, have a different take.
According to a Kaiser Health News report on the USA Today website, more employers are requiring employees to go for a medical evaluation before determining how much the individual worker will have to pay for coverage.
For those who take good care of themselves and don’t smoke or have issues with blood pressure or cholesterol, the savings can reach from the hundreds to thousands of dollars a year, depending on the plan.
While some see test requirements as an invasion of privacy and others question whether these types of programs have any role in improving health or substantially reining in costs, there’s no doubt that more and more companies are going in this direction.
Fifty-four percent of employers with health plans now require some type of screening to determine how much an employee pays. This is up from 49 percent in 2010, according to Aon Health.
Most plans, up until now at least, have tested workers but not family members. According to Aon’s research, 57 percent of employers plan to add incentives for others covered under its plan who undergo pre-testing within the next three to five years.
"A lot of costs come from spouses, but only 29 percent had incentives for spouses," Cathy Tripp, a senior vice president at Aon, told Kaiser Health News.
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Discussion Questions
Discussion Questions: Should employers be able to require medical tests of employees before putting them on company health plans? Should this also extend to other family members covered under an employer’s insurance plan?
Poll
Employers shouldn’t be able to exclude employees from health insurance programs, especially where COBRA laws apply (without even getting into the requirements of the new health care law). But it does make sense to require a sliding scale of rates based on one’s health status and lifestyle. Underwriting based on risk factors has been an accepted practice in auto insurance for many years, and the same principle can apply here. As long as the higher rates don’t become prohibitive to the point of being exclusionary, it seems like a fair practice.
It’s useful to ask this question from the other end. Namely, should employees be rewarded with lower premiums for maintaining a healthy life-style? In other words, if an employee and his/her family keep healthy, why should they pay more to cover other employees that don’t?
Health care costs are rapidly becoming one of the largest controllable expenses that a company faces. Like other expenses, this is one that needs to be managed. Giving incentives (lower premiums) to employees to help manage this expense center makes perfect sense.
I don’t know if they should, but they should have the right to do it. If it means not being able to attract quality employees, then a company needs to decide if it’s worth it. However, if a company is a “warm body” employer where all they need is people to perform simple tasks, then sure it pays off to weed out the unhealthy. Before I was able to start my last “real” job, I had to undergo an extensive physical and psychological examination.
Requiring tests are a form of discrimination against smokers, the obese, people with high cholesterol, etc. This should NOT be allowed.
Well, this is a political “hot potato,” to say the least. This gets into pre-existing conditions, what are the individual guidelines for each employer (e.g., if a certain affliction costs a certain amount of additional insurance premiums at one employer, what should it cost at another employer?). This is a slippery slope and I think there needs to be consistency across employers. However, looking at current variances across employers for health insurance coverages and costs, I don’t think this problem will be easily or quickly solved. Stay tuned….
First the connection of health insurance and employment is ludicrous. It makes no business sense. It makes U.S. companies less competitive with the rest of the industrialized world. It discourages entrepreneurship.
It makes no social sense. Are the only citizens worthy of health care the ones that are employed?
And, the infringement on privacy is outrageous. While one can perhaps justified higher costs for those who do not live healthy lifestyles, how do you justify higher cost for those who do but have conditions not related to lifestyle.
And while theoretically all types of safeguards can be put in to protect the result of the medical test from the employer, the one that will be very apparent is the payroll. The employer may not know what it is, but they will know which employees and paying more and will assume that there is something wrong.
It is hard for me to believe that this is a discussion in the United States. Somehow it feels like the East German Stasi.
NRF was one of the industry organizations to skewer the National Healthcare Act along with other business groups such as the US Chamber of Commerce. However, if this is type of thinking is coming from business, workers will ultimately rise up and force a national plan through a combination of voting for healthcare supporters and/or demonstrations. Many workers and their family members with preexisting conditions have no control over the disease that they have due to their genetic make up. Following the testing logic, companies could mandate DNA tests to determine if a person is predisposed to debilitating diseases such as Lou Gehrig’s disease or less debilitating diseases with higher cost for drugs and physician care such as coronary artery disease. With this information in hand, and to keep their insurance costs down, a company could determine not to hire a person due to a genetic make up that the person has no control over and whether or not the person is showing signs of the disease. Medical testing for medical insurance is another form of discrimination.
Employers shouldn’t open themselves up to a law suit … or to “shooting themselves in the foot.”
Employers have figured out that healthy employees are more productive, loyal, easier to have lasting relationships with as associates. Unless there is a job-specific health need to be in place before employment/ongoing employment (e.g. — you have to have adequate vision to fly a commercial airliner), employers should not require medical tests. Employers, along with their insurance agents, should encourage positive health practices, annual physicals, sensible diet, awareness of medical issues, etc. Those types of practices are useful to the associate, hold down overall costs for the business and premiums, and demonstrate the bond between associate and company.
It’s not like me, really, but somehow on this topic I’d be in the “yes but” camp. I’d say yes, employers should be able to pre-screen employees for insurance, but only for “controllable” health issues. So, in other words, you’d have to ‘qualify’ to get health insurance. BMI would be a key measurement, pre-existing cancer would not.
Okay, I confess; I stole that. I was in Japan this week and their government is instituting a program something along those lines: if your BMI is over 25 (obese), you HAVE to enter a class to correct it or lose your insurance. And since obesity is a leading cause of many health issues BUT it is controllable, it makes sense to me.
I can just hear everyone screaming about having the “freedom” to be obese and have others pay for their maladies. I’m ready for the beat down. Fun topic!
As a cancer patient and plain old human being, Gene Detroyer said it all for me.
Curiously, many people who would not advocate the same salary for everyone from the CEO down to a janitor — at least I hope they wouldn’t — have no problem advocating giving all of these people exactly the same insurance coverage. Strange. Anyway, given the legal restrictions on “discriminating” against people based on practically any criteria that would have meaning, I don’t see what value this idea really has.
For those who agree with one panelist’s comment that “employers should not require medical tests:” The last time I looked, employers’ across-the-board drug tests were medical tests and they’ve been around decades. And those who fail drug tests are discriminated against by not being employed. What a shame.
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Employers shouldn’t be able to exclude employees from health insurance programs, especially where COBRA laws apply (without even getting into the requirements of the new health care law). But it does make sense to require a sliding scale of rates based on one’s health status and lifestyle. Underwriting based on risk factors has been an accepted practice in auto insurance for many years, and the same principle can apply here. As long as the higher rates don’t become prohibitive to the point of being exclusionary, it seems like a fair practice.
It’s useful to ask this question from the other end. Namely, should employees be rewarded with lower premiums for maintaining a healthy life-style? In other words, if an employee and his/her family keep healthy, why should they pay more to cover other employees that don’t?
Health care costs are rapidly becoming one of the largest controllable expenses that a company faces. Like other expenses, this is one that needs to be managed. Giving incentives (lower premiums) to employees to help manage this expense center makes perfect sense.
I don’t know if they should, but they should have the right to do it. If it means not being able to attract quality employees, then a company needs to decide if it’s worth it. However, if a company is a “warm body” employer where all they need is people to perform simple tasks, then sure it pays off to weed out the unhealthy. Before I was able to start my last “real” job, I had to undergo an extensive physical and psychological examination.
Requiring tests are a form of discrimination against smokers, the obese, people with high cholesterol, etc. This should NOT be allowed.
Well, this is a political “hot potato,” to say the least. This gets into pre-existing conditions, what are the individual guidelines for each employer (e.g., if a certain affliction costs a certain amount of additional insurance premiums at one employer, what should it cost at another employer?). This is a slippery slope and I think there needs to be consistency across employers. However, looking at current variances across employers for health insurance coverages and costs, I don’t think this problem will be easily or quickly solved. Stay tuned….
First the connection of health insurance and employment is ludicrous. It makes no business sense. It makes U.S. companies less competitive with the rest of the industrialized world. It discourages entrepreneurship.
It makes no social sense. Are the only citizens worthy of health care the ones that are employed?
And, the infringement on privacy is outrageous. While one can perhaps justified higher costs for those who do not live healthy lifestyles, how do you justify higher cost for those who do but have conditions not related to lifestyle.
And while theoretically all types of safeguards can be put in to protect the result of the medical test from the employer, the one that will be very apparent is the payroll. The employer may not know what it is, but they will know which employees and paying more and will assume that there is something wrong.
It is hard for me to believe that this is a discussion in the United States. Somehow it feels like the East German Stasi.
NRF was one of the industry organizations to skewer the National Healthcare Act along with other business groups such as the US Chamber of Commerce. However, if this is type of thinking is coming from business, workers will ultimately rise up and force a national plan through a combination of voting for healthcare supporters and/or demonstrations. Many workers and their family members with preexisting conditions have no control over the disease that they have due to their genetic make up. Following the testing logic, companies could mandate DNA tests to determine if a person is predisposed to debilitating diseases such as Lou Gehrig’s disease or less debilitating diseases with higher cost for drugs and physician care such as coronary artery disease. With this information in hand, and to keep their insurance costs down, a company could determine not to hire a person due to a genetic make up that the person has no control over and whether or not the person is showing signs of the disease. Medical testing for medical insurance is another form of discrimination.
Employers shouldn’t open themselves up to a law suit … or to “shooting themselves in the foot.”
Employers have figured out that healthy employees are more productive, loyal, easier to have lasting relationships with as associates. Unless there is a job-specific health need to be in place before employment/ongoing employment (e.g. — you have to have adequate vision to fly a commercial airliner), employers should not require medical tests. Employers, along with their insurance agents, should encourage positive health practices, annual physicals, sensible diet, awareness of medical issues, etc. Those types of practices are useful to the associate, hold down overall costs for the business and premiums, and demonstrate the bond between associate and company.
It’s not like me, really, but somehow on this topic I’d be in the “yes but” camp. I’d say yes, employers should be able to pre-screen employees for insurance, but only for “controllable” health issues. So, in other words, you’d have to ‘qualify’ to get health insurance. BMI would be a key measurement, pre-existing cancer would not.
Okay, I confess; I stole that. I was in Japan this week and their government is instituting a program something along those lines: if your BMI is over 25 (obese), you HAVE to enter a class to correct it or lose your insurance. And since obesity is a leading cause of many health issues BUT it is controllable, it makes sense to me.
I can just hear everyone screaming about having the “freedom” to be obese and have others pay for their maladies. I’m ready for the beat down. Fun topic!
As a cancer patient and plain old human being, Gene Detroyer said it all for me.
Curiously, many people who would not advocate the same salary for everyone from the CEO down to a janitor — at least I hope they wouldn’t — have no problem advocating giving all of these people exactly the same insurance coverage. Strange. Anyway, given the legal restrictions on “discriminating” against people based on practically any criteria that would have meaning, I don’t see what value this idea really has.
For those who agree with one panelist’s comment that “employers should not require medical tests:” The last time I looked, employers’ across-the-board drug tests were medical tests and they’ve been around decades. And those who fail drug tests are discriminated against by not being employed. What a shame.