Employers turn to wellness programs to put health premiums in check

Earlier this year, administrator Frank V. Aloise stood before staff members at Springside Chestnut Hill Academy with this news: Their health-care premiums would rise by zero.

At Campus Apartments L.L.C., the student-housing developer and manager in West Philadelphia, the news from official Helen Marshall was the same: zero increase.

At a time when average health-insurance premiums continue to go up - anywhere from 4 percent to 10 percent in 2012, depending on the study - these two organizations managed to bend the cost curve, as they say.

How did they do it?

Aloise and Marshall are wholehearted apostles of wellness, fully embracing the idea that the way to lower premiums is to make sure that the people who are covered are healthier.

"It's a huge transformation," said Aloise, Springside Chestnut Hill Academy's chief financial officer. He lost 20 pounds.

"You can't look at wellness as a short-term fix," said Marshall, human-resources vice president for Campus Apartments, who lost 28 pounds. "It's going to be a three- to five-year initiative."

Though the overarching theory was the same, the two employers took different approaches: The school used the carrot, promoting voluntary participation. Campus, which operates university-affiliated student housing in 25 states, hit its 1,000 employees nationally in their wallets.

"What these employers are doing is definitely in line with the market," said Christopher McCarthy, a health-benefit expert at the Philadelphia office of Mercer L.L.C., a national benefits-consulting firm.

"Companies are asking more of their employees," McCarthy said. "The incentives are getting higher, and the bars to achieving them are higher."

At Campus, Marshall was stunned two years ago, when, for the 2011 benefit year, its insurer presented her with an increase of 63 percent.

"When you are staring at 63 percent, you're not going anywhere that's good," she said.

To get the premium increase for 2011 to a barely palatable 28 percent, Marshall chopped the daylights out of the plan, hiked deductibles, and then had the "fun" of selling higher-cost, lower-coverage insurance to employees, who must pay to cover their families.

"You go to employees and say, 'Congratulations, you've been given a 3 percent wage increase, but your insurance is going up 28 percent.' "

After years of offering largely ignored incentives such as discount gym membership to employees, the company resolved to stop paying 100 percent of employee premiums - unless employees met conditions.

"Now, the carrot is gone, and we're using the stick," said Marshall.

For 2013, Campus will pay 60 percent of premiums, bringing it up to 100 percent for nonsmokers who record a self-chosen exercise plan through a company portal.

Employees also must agree to get physicals, obtain biometric screenings, and enroll in a risk-management program developed by the insurer. Under the program, people with high blood pressure would be contacted by a nurse and offered help.

To remove obstacles, employees were allowed to take paid time off from work for their physicals.

Initially, Marshall said, plan utilization went up as employees discovered conditions and began treating them. But $50,000-plus claims declined from 11 to three in two years.

By contrast, the private K-12 school in Northwest Philadelphia, which buys its insurance through an association with 142 other private schools in the area, instituted "Naturally Slim," a voluntary health-and-wellness program. It provides Internet lessons on nutrition, dieting, and sensible eating.

The schools started with a "Know Your Numbers" campaign, operating under the assumption that certain statistics, such as blood pressure, cholesterol, weight, and glucose levels could predict serious health problems.

Participants are tested before and after the 10-week program. Most will see reductions in some of those numbers, Aloise said. So committed to the concept were the schools that many, including Aloise's, brought a company in so employees could be tested during their lunch breaks.

Nutritionists are now available for free consultation, and staffers can attend group exercise classes after school.

Two years ago, middle-school science teacher Ellen Koenig parked herself on a folding chair at a staff meeting to listen as Aloise introduced "Naturally Slim."

At 300 pounds, she filled up parts of three chairs - so heavy that no one else could squeeze in next to her.

"I had tried everything," she said.

Now, Koenig weighs 180 pounds and runs half-marathons. She has a boyfriend who tells her, frankly, that he wouldn't have looked twice at her when she weighed 300 pounds.

After six months, she no longer needed her diabetes medicine. Going off it saved the plan $2,550 in one year, more than recouping the $475-a-person Naturally Slim enrollment fee.

She jokes to her pupils that, at her old weight, it was as if she were carrying at least one of them on her back.

"I'd probably weigh 350 by now," she said. "I really think Frank saved my life."

Many wellness programs combine physical examinations with health-risk assessments - calculations of the potential for serious health problems, based on statistics such as blood pressure and cholesterol.

Nearly four in 10 large employers ask their employees to complete health-risk assessments, while just under one in five smaller employers make similar requests.

Among the employers that ask employees to complete health-risk assessments:

Two-thirds of large employers offer financial incentives.

Eleven percent require employees with risk factors to complete wellness programs or face financial penalties.

Nine percent reward or penalize employees based on whether they meet certain health standards.

Source: Kaiser Family Foundation and Health Research & Educational Trust

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