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As the cost of providing health insurance has continued to rise over the past decade, employers have been asking their workers to shoulder more of the expense.
Now many companies are asking workers to take a more active role in managing their financial and physical health. The cost of health care insurance premiums has risen 26% since 2009, according to Kaiser Foundation's 2014 Employer Health Benefit Survey. In that time, there's been a 39% increase in the amount that workers have been asked to contribute for their own premiums, and a 37% increase in the amount they've contributed to family coverage.
“Employers just can't take all the burden on themselves,” says human resource consultant Karen Dobbyn, of KMA Human Resource Consulting LLC in Portland.
While most employers still offer coverage to workers' families, many of them are now asking workers to pony up more for those premiums. The amount that workers contribute to family coverage has increased 37% since 2009, according to the Kaiser survey.
“Many companies have had to take a really hard look at whether they can afford to offer coverage for dependents, and if they do, whether they pass the whole cost on to employees,” says Dobbyn.
Others are offering a financial incentive to employees who are insured under a spouse's plan if an employee's spouse can get coverage elsewhere. According to the Kaiser survey, 9% of firms that offer family coverage restrict eligibility to a spouse when he or she has another coverage option.
Companies are also offering voluntary plans for life and disability insurance. “The premium costs are paid by the employee through payroll deduction and are less costly to the employee relative to buying the plan on their own, without a group rate,” said Dobbyn.
Employers are also redoubling their efforts to help their workers get financially healthier. Not just helping workers save for retirement, but also helping them manage a mortgage and student debt, elder-care costs, and helping parents of college-bound kids save for tuition payments.
“We're seeing more and more plan sponsors go beyond the basic 401(k) services, to help their employees with respect to the full financial picture,” says Josh Chase, certified financial planner with Lebel & Harriman LLC, a Falmouth consultancy that manages retirement plans for employers.
When the market declined in 2008, many companies dropped generous retirement benefits, and stopped matching contributions and offering profit sharing. But as more workers started borrowing from their retirement plans, and employers started hearing more about their workers' financial struggles, “they felt the need to offer some kind of help,” says Chase.
These programs can range from lunch-and-learn seminars to facilitating one-on-one consultation with financial advisers off the job site, where employees can get guidance on contending with their individual financial challenges and reaching their savings goals.
“A lot of employers are recognizing that their employees might have outside financial struggles that do impact the workplace,” says Chase. “They recognize that by increasing the financial wellness of their employees, it increases productivity and decreases absenteeism.”
Indeed, 20% of employees say their financial issues have been a distraction to them while at work, according to the 2015 “Employee Financial Wellness” survey from PriceWaterhouse Coopers. Each week, 37% of workers spend three or more hours thinking about or dealing with their personal finances.
To be sure, getting employee buy-in can be a challenge, Chase says. “It's so emotional and so personal, and it's difficult for people to admit when they're having struggles,” he says. “But the employers that promote it are generally going to see healthier retirement plans, and the number of people who are participating in the plan and how much they're saving.”
Employers are also getting more aggressive about helping their workers save for retirement. Many employers have shifted to automatic enrollment in 401(k) plans, allowing employees to opt out if they choose, rather than having employees initiate the participation, says Chase. This approach helps break through the inertia that often keeps employees from starting to save. “It's always easier to not do anything than it is to go to fill out the forms and go to the HR department,” he says.
Other employers are focusing on helping their employees be healthier so they don't have to use that health insurance benefit as often. Kaiser reports that 74% of companies now offer at least some sort of wellness program, such as health risk assessments, lifestyle or behavioral coaching, nutrition classes, web-based tools for healthy living, discounts on gym memberships, on-site fitness centers and wellness newsletters.
While larger employers have offered wellness programs for years, now smaller companies — those with 50 employees or fewer — are starting to use these initiatives more, says Mark Holmes, owner of Health Coaches Inc., a Portland provider of on-site coaching, health screening, fitness and wellness center design.
“If workers are chronically out of the office, a disproportionate portion of the work falls to someone else. And many companies just aren't in a position to add more staff” to do that work, says Holmes.
Now, employers are moving beyond offering generic programs like company-wide fitness challenges or gym discounts, and crafting more customized initiatives, designed to garner more participation from the people who need the benefit the most.
“The challenging part is delivering it in a way that maximizes participation and breaks down as many barriers as possible for those with the greatest risks,” Holmes says.
Often that means taking a layered approach — say, by conducting health screenings, then following up with private coaching, online wellness applications that employees can use on their own and newsletters with information about things like safe exercise and healthy recipes.
“We're trying to provide more privacy with these programs,” says Holmes. While someone who has a major weight or chronic health issue may not feel comfortable showing up to a group class, “if you attract that individual to take one to two action steps in the privacy of their own home, sometimes that's the catalyst that starts them on the path to wellness,” he adds.
Just as important is reaching the younger workers, who often aren't even getting routine physicals and might not know health issues are lurking.
“A lot of the individuals in their 20s and 30s aren't aware that their blood pressure is high or borderline high, because they're not getting physicals,” he says. “Our goal is to identify those issues before they become chronic illnesses.”
It can be difficult to measure return on investment on wellness programs. Programs carry direct program costs, as well as indirect costs such as time and staffing, but many employers are finding that the boost to a wellness culture pays off.
Even beyond the prospect of lowering health-care premiums, “it's worth supporting,” says Susan Ouellette, manager of human resources with Kleinschmidt, a Pittsfield-based consultancy that provides engineering, regulatory and environmental services to the hydroelectric industry.
At Kleinschmidt, for instance, the company helps fund a personal trainer to visit the workplace twice weekly along with a weekly yoga class. Employees are encouraged to use their lunch breaks to run and go on bike rides, and are even given a place to store their bikes. An on-site workout area has become a central gathering place for employees who work at four separate buildings on campus.
“We have stressful work and it's just good for people to get out of their offices and outside and move,” says Ouellette, who is president of the Kennebec Valley Human Resources Association. “It gives people an opportunity to do something besides work, and an opportunity to build some camaraderie while reducing stress and enhancing overall wellness.”