To help combat the rise in costs, more businesses may be turning to corporate wellness initiatives and employee incentive programs.
Businesses continue to prepare for changes to healthcare laws related to the Affordable Care Act (ACA). Legal news source JD Supra reports that 75 percent of human resource executives expect that the ACA will increase their administrative burden. To help combat the rise in costs, more businesses may be turning to corporate wellness initiatives and employee incentive programs.
A recent study by Aon Hewitt confirms the feeling among HR executives that healthcare prices will increase. The HR consulting firm estimates that the price for premiums will increase by 40 percent in the next six years. On average each employee will cost $8,800 per year, despite the out-of-pocket costs for each worker increasing by 64 percent during the same period.
The study shows that companies are using a variety of methods to control these rising expenses, but a significant number of firms anticipate using incentive programs to reward employees who exhibit good behavior. Staff members who show measurable progress toward health goals could be rewarded for their actions. These could be preventative measures, such as joining a gym or losing weight, or they may be more specific, like eliminating co-pay if an employee shows he or she is following treatment for a chronic disease.
"Over the past decade, employers have reserved an increasing portion of their cash compensation program to pay-for-performance bonus programs," said John Zern, executive vice president for Aon Hewitt. "We see similar approaches emerging with health benefits, which reward those employees who actively participate to achieve improved health outcomes."
Employee incentive programs have shown to not only reduce healthcare costs, but improve productivity as well. Corporate Wellness Magazine states that for every $1 spent on wellness programs, $4 in revenue is generated from reduced turnover, higher engagement levels and lower healthcare costs.