Insurers back incentives for participating in wellness efforts

February 09, 2007|By M. William Salganik | M. William Salganik,Sun reporter

It began as not quite a mom-and-apple-pie idea. More of a mom-and-baby-powder idea.

An employer approached CareFirst BlueCross BlueShield asking if the insurer could offer "a basket of goodies - baby oil, all that stuff" as an incentive for pregnant employees to get prenatal care, according to William Casey, CareFirst's vice president for government affairs.

CareFirst's medical staff loved the idea. Insurers such as CareFirst are putting more emphasis on preventive care and "wellness promotion" programs such as smoking cessation or exercise classes.

But CareFirst's legal department was alarmed, Casey related. They concluded the gift baskets ran afoul of Maryland's insurance code, which prohibits insurers from discriminating in premiums or benefits and from giving rebates or "any valuable consideration" that could be viewed as an inducement to enroll.

So, Casey, as CareFirst's lobbyist, and Dr. Richard Safeer, CareFirst's medical director for preventive medicine, went before the House Health and Government Operations Committee in Annapolis yesterday, trying to persuade lawmakers to amend the law, allowing incentives to be offered in exchange for participation in wellness programs.

Del. Dan K. Morhaim, a Baltimore County Democrat, is sponsoring the legislation. The bill would permit "reasonable" incentives for participation in health promotion programs, but not for actual results. So incentives could be given for enrollment in weight management classes, but couldn't be contingent on actual weight loss.

The idea won support at the bill hearing yesterday from other insurers that, like CareFirst, want to offer incentives, and from business groups.

State regulators also supported the concept.

"We believe wholeheartedly in our rebate law," which is designed to prevent insurers from enticing consumers into buying bad policies, Kimberly Y. Robinson, the Maryland Insurance Administration's director of government relations, told lawmakers. However, she added, wellness incentives should be allowed, and are "common in the self-funded large employer market."

Large employers with self-insured health plans are not subject to state regulations, so they can already offer incentives.

"We see all kinds of incentives these days," Tracy Watts, a principal with Mercer Human Resource Consulting who advises employers in the Baltimore-Washington area about health benefits, said in an interview yesterday.

Typically, she said, employers offer $50 to $100 - often as a deposit into a health spending account - for completing a health assessment questionnaire, and additional incentives for employees with chronic diseases to enroll in programs designed to keep them healthy.

Safeer said that one of CareFirst's large employer clients is entering employees who complete a health assessment in a drawing to win a plasma-screen television in time for the NCAA basketball tournament in March.

Once an employee completes the assessment, CareFirst provides information, and in some cases "coaching" programs, to deal with problems that turn up. Under federal health privacy rules, he said, insurers cannot share private health information with employers, so the data are confidential.

While CareFirst offers wellness help to all members, participation is low without incentives. For example, Safeer said, only about 15 percent of eligible members use Web tools that give advice on nutrition, exercise and other wellness issues. Published research, he continued, suggests that incentives could increase participation to the 30 percent to 40 percent range.

A report by PricewaterhouseCoopers released this week noted that employers who have launched wellness programs want to moderate direct spending on health - Microsoft found that health costs for obese employees were 35 percent to 40 percent higher.

But, the report continued, employers are even more concerned about the indirect costs of chronic diseases, such as absenteeism or poor work performance. For example, PricewaterhouseCoopers cited a study in the United Kingdom by the multinational Unilever, which found that employees who scored better on a health risk assessment also, on average, had higher performance ratings at work.

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