Worker Health, Not Rising Costs, Should be the Focus

This is part of a special advertising section on the Outlook for 2012.

Sunday, October 2, 2011
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Is it coincidence that two of the primary issues blamed for macroeconomic fallout -- political disputes and personal household struggles -- across this country are health and wealth? Businesses throughout the nation are quick to identify managing rising healthcare costs as a top roadblock to achieving financial prosperity, while most Americans struggle with unexpected medical costs amid a down economy.

Consider this revealing statistic: In a recent 2010 Merrill Lynch Wealth Management poll, respondents were asked what life lessons are most important to impart to their children. More than half (51 percent) of the adults surveyed cited financial know-how, while only 11 percent said staying physically fit. Yet, 40 percent of these same respondents said healthcare costs are keeping them up at night.

Poor health is a financial shackle around the ankle of anyone trying to live a financially secure life or around any company's attempt at revenue growth. Health crises directly contribute to financial chaos -- high costs of medical bills diminish personal wealth or contribute to personal debt, and accidents, illnesses or disabilities cause loss of income and one less worker contributing productivity and innovation to the worksite.

The year 2012 might be the time to re-examine the definition of wealth to encompass more than just money and material assets, and HR executives will need to lead the charge. HR decision-makers should pose the idea that perhaps the top priority for company leaders shouldn't be to manage "rising health costs" but, rather, should focus on the "rising health" of its workers. Imagine if consumers invested in their health through lifestyle choices, preventive care and securing adequate insurance coverage, just like they invest in wealth-building assets such as 401(k)s or college educations?

The harsh reality is that, with or without comprehensive healthcare reform, employers remain on course for feeling the effects of rising healthcare costs in some form or another. Numerous organizations are using traditional approaches such as cost-cutting or cost-shifting to try and reverse that trend; however, it may not be enough on its own. High medical expenses and unhealthy habits of workers erode corporate wealth and diminish productivity.

Nevertheless, most companies are focusing on controlling health-insurance costs and letting that issue take precedence over ensuring adequate insurance coverage to help employees protect their health, improve productivity levels and enhance corporate reputation as a desired place to work.

Stressing prevention with employees can drive both a healthier workforce and company productivity while keeping spending at bay. Implementing and promoting a wellness program can help prevent certain illnesses or injuries by encouraging proactive health practices.

The Patient Protection and Affordable Care Act focuses heavily on wellness and prevention, representing a huge opportunity for employers to gain financially through rewards and incentives, but also through controlled healthcare costs as an outcome of preventive care.

Supplemental or voluntary insurance plans help people cope with incremental out-of-pocket costs associated with serious accidents or illnesses -- costs major-medical insurance was never intended to cover. And, voluntary policies present no direct costs to the employer, making them attractive solutions to managing expenses while giving employees more control over their benefits decisions and access to additional coverage.

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More and more organizations are turning to voluntary insurance options as a solution to market challenges and because their workers are asking for them. According to the 2011 Aflac WorkForces Report, 61 percent of employees at large companies say they would be likely to apply for voluntary insurance made available by their employers, and 57 percent of employees at small companies say they would be likely to apply for them. In addition, 30 percent of employers said they are considering adding a new voluntary option within the next two years, according to LIMRA's 2011 Voluntary Worksite Benefits: Penetration and Market Potential report.

Wellness initiatives can mean significant investments for employers, something voluntary insurance can also help manage. By having a voluntary-insurance policy with a wellness benefit, policyholders can receive a cash benefit if they have a covered wellness procedure or exam.

Including a policy with a wellness benefit not only sends a message that employees matter, but it also benefits both the employer and the employee. For many companies that have already assumed much of the responsibility for the care of workers, wellness benefits encourage preventive health among employees.

The provisions included in the healthcare reform law with regard to wellness and prevention illustrate just how important this issue has become. Effective wellness programs may result in more highly productive employees, fewer sick or injured days, and reduced medical leave. Voluntary-insurance policies -- available at no direct cost to employers -- feature wellness benefits as a proactive, preventive option that can help companies motivate employees, minimize expenses and create a better overall work environment.

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