Health Incentive Plan

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Health Incentive Plan – Will IU keep up with the Joneses?
-By Rachel M. McCann

With the new Health Incentive Plan (HIP) already underway at IU, many employees are anxious to see exactly what the final plan will be like. This led me to question whether there are similar plans already in effect at other universities/companies and how IU’s current plan compares to what “the Joneses” are doing.

First things first- let’s examine what we know about IU’s HIP. IU is hoping to achieve several goals with its new voluntary HIP. In the first phase, they hope to cut back on health care costs by offering incentives for employees to get healthier. Also, they are encouraging employees to commit to healthier behaviors and choices. The plan is set up to offer “credits” to be used toward insurance premium reductions. This can be a partial decrease based on whether the employee is able to meet both goals of being tobacco free and completing the recommended test/screenings. According to a 1/11/2011 IU News release, “A later phase will focus on physician treatment plans and prescription drug regimens. Coaching and support programs will be provided for employees and their spouses with such concerns as: tobacco cessation, blood pressure, diabetes, nutrition, body mass, etc.”

Now, let’s look at a couple of established health incentive plans. The first is the HIP offered by Ohio State University, which has been in effect since 2006. They call it “Your Plan for Health” or “YP4H”. According to OSU, “YP4H's primary focus is on helping faculty, staff and their families reach the healthiest state possible by offering a variety of programs and incentives for identifying and acting on health care conditions, promoting cost-efficient choices based on individual needs, and taking control of health care spending.”
Similar to IU, OSU's first step to earning the incentives is having employees complete a Personal Health Assessment. (However, IU has now removed this requirement after employees raised strong privacy concerns.) After taking the Personal Health Assessment OSU employees will then qualify for incentives like:
1) Medical premium reductions up to $360.
2.) Enrollment in an Incentive Points Program that tracks healthy behaviors and activities to earn up to an additional $125.
OSU also offers resources such as educational programs like Veggies 101, fitness center discounts, tobacco cessation programs, and a Weight Watchers-at-Work program with reimbursement for attendance.
Overall, OSU’s plan is similar to IU’s, except it seems to currently offer its employees a wider range of incentives.

The second HIP to compare with IU’s plan is Safeway Inc., an international supermarket chain that operates thousands of stores and employs a large number of people. Safeway rolled out their plan in 2005. According to a 2009 article in the Wall Street Journal titled How Safeway is Cutting Health Care Cost, by CEO Steven Burd, “The results have been remarkable. During this four-year period, we have kept our per capita health-care costs flat (that includes both the employee and the employer portion), while most American companies' costs have increased 38% over the same four years.”

Safeway’s program is designed to motivate their employees to make behavioral modifications which lead to a pronounced decrease in the employee’s insurance premiums. The company contends that 74% of all health care costs are confined to four chronic conditions: cardiovascular disease, cancer, diabetes and obesity. They are adamant that the majority of these conditions are preventable. Mr. Burd says “Safeway's Healthy Measures program is completely voluntary and currently covers 74% of the insured nonunion work force. Employees are tested for the four measures cited above and receive premium discounts off a "base level" premium for each test they pass. Data is collected by outside parties and not shared with company management. If they pass all four tests, annual premiums are reduced (by) $780 for individuals and $1,560 for families. Should they fail any or all tests, they can be tested again in 12 months. If they pass or have made appropriate progress on something like obesity, the company provides a refund equal to the premium differences established at the beginning of the plan year.”

Essentially, Safeway rewards their employees’ healthy lifestyles and choices with decreased insurance premiums. Similarly, IU is offering discounts on premiums once an employee has signed the tobacco free affidavit and completed the bio-metric screening. The difference is that Safeway allows unused portions to roll over to the next year up to a maximum amount.

IU’s plan is in its infancy, and time will tell what adjustment and additional incentives might come in the future. It appears the way to a successful HIP is to give employees a sense of ownership and control of their health care cost based on their individual participation. An employee’s behavioral choices will directly lead to healthier lives resulting in decreased health care costs.

We (IU employees) need to have a higher sense of accountability when it comes to our health care. Our choices are what will make or break us.
Overall I think IU is making steps in the right direction. If they continue to broaden the range of incentives, more employees may be willing to participate. If this happens we will all be winners no matter what “the Joneses” are doing.

Sources
IU News Room (1/11/2010) Incentive plan will help IU employees improve health, contain health care increases IU News Room [Retrieved 4/7/2011], http://newsinfo.iu.edu/news/page/normal/13048.html
OSU Health Plan Website [Retrieved 4/7/2011], https://www.webmdhealth.com/OhioStateYP4H/default.aspx?secure=1#
Steven Burd CEO Safeway Inc. (6/12/2009). How Safeway is Cutting Health-Care Costs. Wall Street Journal [Retrieved 4/7/2011], http://online.wsj.com/article/SB124476804026308603.html