To promote consumers’ involvement in their health-care decisions—which also reduces health-care expenses in the long run—regulations regarding wellness programs are included in health-care reform. Wellness programs provide a way for employers to lower the cost of health insurance coverage and reduce expenses, due to a decrease in absenteeism and presenteeism.
Employers can receive premium discounts of up to 30% of the cost of coverage for offering wellness programs to employees. Employers also can offer increased incentives to employees for participating in their wellness programs and for meeting certain health targets.
For employers whose programs meet the PPACA conditions, employees can receive up to a 20% rebate of the portion they pay for the total health insurance premium, the amount they pay in cost-sharing, and co-payment waivers. Employers must offer an alternative to employees who have physical or medical limitations that prevent them from participating or from meeting the health targets.
Employers also must meet requirements regarding wellness program structuring. Employers, for instance, are required to pay the entire cost of implementing a wellness program. And employers can’t assign any copayments or cost-sharing to their wellness initiatives.
Employers also are required to evaluate their wellness programs. The Department of Health and Human Services will provide assistance and resources to help with the evaluations.
Because of the costs and reporting burdens of complying with the PPACA, many expect to see significant growth in consumer-driven health plans (CDHP). In the next 10 years, CDHPs could be more prevalent than preferred provider organization (PPO) plans. Premium increases under CDHPs are typically lower than those of PPO plans. In addition, CDHPs provide a way for employers to avoid the Cadillac tax.
Some employers offer their employees only a CDHP, or a CDHP along with a PPO. In general, employers offer CDHPs in conjunction with HSAs or health reimbursement arrangements (HRA). With these savings plans, the employer and/or the employee place a specified dollar amount in the plan.
Both HRAs and HSAs tend to encourage consumers to explore all options and corresponding costs. Benefit design, however, affects this likelihood. Consumers are less likely to question tests or treatment if their out-of-pocket expenses are low, and more likely to consider all angles of the test or treatment before going forward if the plan has high deductibles or out-of-pocket expenses.
The main difference between these accounts is
that HSAs belong to the employee and HRAs belong to the employer. The employer and/or the employee contribute money to an HSA, whereas only the employer contributes to an HRA. As such, the money not used in an HSA accumulates from year to year. On the other hand, the money left over in an
HRA rolls over at the employer’s discretion, and
goes back to the employer if the employee leaves the organization.
Health-care coverage and other benefits, wages, and working environment all contribute to the morale, and hence the productivity, of employees. To attract and retain peak performers, your credit union will need to be creative and flexible in administering all three.
Flexibility can increase productivity
Flexible work arrangements—such as telecommuting, flexible hours, and mobile technology—help employees achieve work/life balance, which increases morale. Flexibility also helps employers attract, reward, and retain peak performers.
Another benefit of providing flexibility is that it can make up for low wage increases. As a reflection of the slowly improving economy, both the incidence and the percentage of pay raises are slowly growing. Compensation experts, however, predict that annual wage increases won’t return to the “old norm” of 3% to 4%. Instead, the “new norm” will be wage increases of 2% to 3%—and incentive plans.
“Workplace flexibility helps businesses succeed and employees thrive by giving people an integral role in deciding how, when, and where they do their best work,” according to shrm.org.“That means higher productivity and employee engagement, lower turnover costs, and more innovation.”
- 2011-2012 Credit Union Environmental Scan
- 2011-2012 Complete Credit Union Staff Salary Survey Report