Demonstrations of support beat financial incentives for boosting employee health plan participation

As businesses plan for next year’s open enrollment period, decision makers for employee benefit plans may be surprised to learn that involvement from company leadership plays more of a key role in driving employee medical plan participation than do financial incentives. That’s according to the 2016 Benefit Analytics and Benchmarking Study (BABS), conducted by Wells Fargo Insurance, part of Wells Fargo & Company.

More than 1,000 employers participated in the study nationwide, which contains current data from 2016. The responses represent well over one million employee lives.

Whether establishing a culture of health, demonstrating support of wellness, or narrowing their network of healthcare providers – which can save up to 10% of costs for businesses – Wells Fargo says that employers who take an active role in plan management can favorably impact the total spend on benefit plans.

Little impact from HSA contributions. Key among the findings was that an employer’s cash contribution to Health Savings Accounts (HSAs) does not impact employee participation in plans with HSAs, an attractive lever for employers looking to reduce benefit costs. In addition, financial incentives did not motivate employees to opt out, or waive, medical plan coverage.

“Many of the findings shatter traditional industry narratives that we have been following for the last 10 years, about cash and cash-equivalent incentives with employee benefit plans,” said Nick Allen, national practice leader for customer analytics with Wells Fargo Insurance’s Employee Benefits National Practice. “As it turns out, many employees do not view HSA contributions from their employers as an incentive when choosing plans.”

Involvement takes many forms. Involvement from company leadership plays a key role in driving medical plan participation. This can take the form of establishing a culture of health, demonstrating support of wellness, or narrowing a network of healthcare providers – all of which can save up to 10% of costs for businesses. Employers who take an active role in plan management can favorably impact the total spend on benefit plans.

“We’ve seen senior leaders encourage their employees to leave work early to exercise or to attend their annual physical appointment. That type of encouragement from management sends a strong message, not only boosting employee morale, but having a positive financial impact,” added Dan Gowen, national practice leader with Wells Fargo Insurance’s Employee Benefits National Practice.

More initiatives equal lower premiums. With healthcare costs expected to continue to rise in 2017, employers are looking for more ways to manage benefit expenses. The study found companies that offer more wellness initiatives, such as walking or biking trails, smoke-free environments and lactation rooms, reported lower medical premiums. However, less than one in five employers has a documented strategic plan in place to address wellness and disease management.

While support from senior leadership is important to increase engagement, only 45 percent of respondents indicated seeing support from their executives. Demonstrations of support include active participation in benefits programs (21 percent), endorsement of benefits plans to their board of directors (16 percent), involvement in employee benefits communications (25 percent) and inclusion of employee health and well-being in organizational goals and value statements (17 percent).

SOURCE: https://wfis.wellsfargo.com.

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