2 Ways to Implement Healthcare Incentive Plans for Employees
- September 14, 2018
- Posted by: Gus Altuzarra
- Category: Employee Incentives
Incentivizing your employees to perform well at work is common. But what about incentivizing them to take care of themselves outside of work?
If we truly care about the people of our company, we want them to be living healthy lives. Healthier employees are happier employees, and research shows happy employees perform better at work.
This is partially why healthcare incentive plans for employees are gaining in popularity.
These plans help the overall health of the people that make up your company. And when they’re structured right, they can also decrease your spending on healthcare.
In this post, I will cover the two main employee incentive program examples that apply to healthcare. But first, let’s determine which companies can be a good fit, and which are likely not.
Who sees the benefits of employee incentive programs?
In a perfect world, benefits from these employee incentives could be realized across the board, no matter what type of healthcare you offer.
But in our current system of misaligned interests, it comes down to what type of healthcare plan you provide for your company.
If you’re offering a traditional plan with one of the big insurance carriers, and you’re stuck with a set rate no matter what services your employees use (or don’t use), implementing a healthcare incentive program is probably more work than it’s worth.
However, if your company’s healthcare is being rated based on individual claims, as it is with self-funded and HRA health plans, it is to your benefit to consider implementing these incentive programs.
The Two Main Types of Employee Healthcare Incentive Plans
1. Wellness Incentives
With wellness incentives programs, employees are offered compensation for activities that promote good health. Here’s how it works.
Employees are given a list of activities, each one attached to a specific dollar amount that they can earn when they prove they engage in that activity.
For example, an incentive could be a $250 deductible credit for running a 10K. Or a $200 credit for getting your annual physical and entering your cholesterol and blood pressure levels into the system.
Other incentives could include things like:
- Wearing a Fitbit that tracks and records exercise milestones
- Not using tobacco
- Getting their annual mammogram
- Getting their annual oral exam
By offering these rewards, employees are more likely to take care of themselves. And when they take better care of themselves, your company can be in a better place both culturally and financially.
In addition to wellness incentives, companies can incentivize employees to be more thoughtful consumers of healthcare.
2. Consumer Decision Incentives
With consumer decision incentives, also known as “employee steerage,” employees are incentivized to be proactive in their healthcare decision making.
For example, let’s say someone needs a knee replacement surgery. The employee can begin by determining how far they’re willing to drive to have it performed. Then they can receive a list of “high-value network” providers in that area that are competitive in both quality and price.
The employee is not required to use a provider from this list, but if they do they might receive deductible credit, money in their HRA account, or the fee waived entirely.
Rather than using the closest doctor or the most convenient provider, employees are rewarded when they weigh their options, and choose providers who give the most bang for your buck.
When to Take the Leap
If you’re operating with a self-funded or HRA health plan, the benefits of employee incentive programs make a lot of sense. Because when your company owns it’s claims dollars, you’re going to want to avoid wasting them whenever possible.
Ideally, you’ll want to implement both of these types of healthcare incentive plans for employees, however, I recommend starting with just one because it takes time for you and your employees to acclimate.
But once you do, you can truly be on your way to a happier, healthier company that spends less on healthcare. And we’re here to help you facilitate this every step of the way.
So if you’re interested in what I’ve discussed in this post, I encourage you to reach out. There is no harm in exploring your options, but there very well could be a cost for maintaining the status quo.