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Employee health benefit plans have varying effects for businesses

Employee Benefits
by Steve Bryson
Employee health benefit plans have varying effects for businesses
Employee health benefit plans have varying effects for businesses

Today, a significant number of businesses large and small, across the country, give their employees the option of participating in benefit programs that are designed to not only make those workers fitter and healthier, but also save companies money on their ongoing health care costs. However, new data shows that some of these plans might be more effective than others in achieving the latter goal.

There are two very distinct types of employee health benefit plans favored by businesses these days: Those that help employees manage lifestyles, and those that help them manage diseases, according to a new study from the Rand Corporation. In the case of the former, that usually means encouraging workers to exercise more, quit smoking, eat better, and so on. This usually has a positive effect on worker health over a long period of time, and tend to be extremely popular. For the latter, employees are encouraged to do things that better help them avoid heart disease, diabetes and emphysema, among other issues.

But, employees do not seem to enroll in them very often. In fact, when offered the chance to participate in either kind of program, workers overwhelmingly prefer those for lifestyle management - 87 percent to 13 percent.

What does this mean for businesses?
The statistics for this enrollment disparity poses an interesting problem for companies that offer their workers such options, the report said. The savings realized as a result of participation are the exact opposite of the percentages for enrollment; 87 percent of the reduced costs come as a result of disease management programs, with the other 13 percent granted by lifestyle management. In fact, the return on investment for the latter is just $6 per employee per month. Meanwhile, it's $136 in savings per worker per month for disease management programs, and that is obviously a substantial difference.

It may therefore behoove company decision-makers to look into the ways in which they can encourage workers to be more active participants in the disease management programs that result in short-term benefits for companies, even if they do not provide them for the workers themselves. It also might be wise to have a mix of offerings in this regard to better suit the needs of employees and companies alike. Encouraging broader participation will bring costs down, but striking the right balance between what both sides want may be vital to having such programs catch on.

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