There are plenty of conversations about the rise in health
insurance rates. Politicians on both
sides debate the merits of the ACA and its role, or lack of a role, in shaping the
direction of health care costs. Health care providers, insurance companies and
malpractice attorneys are just a few of those taking some or all of the blame
for rising rates.
One area that deserves more attention but is over looked is
the consumer. A sound risk management practice
is to persuade the insured (consumer) to mitigate some of the risk by changing their
behavior through positive and negative consequences for losses. An example of this is higher or lower auto
insurance premiums based on traffic citations or accident history. Obviously
many medical conditions are out of the control of consumers and no one should
not be penalized for congenital conditions.
But there are numerous lifestyle choices, like quitting smoking or
exercising, that do make a difference. Wellness programs are an avenue to provide
motivation and encouragement to make better choices.
The ACA has in interesting provision that allows employers to
implement a wellness program with group health insurance that costs the employee
more if they do not participate. For
example, you can require employees to pay up to 30% of their health insurance
premiums if they do not participate. Or you may offer smoking cessation programs
worth up to 50% of the health insurance premiums. The applicability to this in Oregon is likely
to be primarily limited to large employers outside of the health insurance
exchange. The Oregon exchange,
CoverOregon, rates all small businesses employees in aggregate thus the
benefits of one employer enacting a wellness program is extremely limited as it
is diffused in the pool. Large employers
in Oregon rated with their loss history will have more of an incentive to
control costs.
In the 2014 Oregon legislative session, an interesting
wellness bill was submitted. HB 4072
would have given a tax break of up to $500 per employee for money spent on a wellness
program. Oregon’s even numbered years are shortened legislative sessions and this
bill appears to have been stuck at in the Revenue committee in the House. Without commenting on the details of this
bill, a tax break that rewards small businesses is an improvement in trying to
halt the rise in health insurance costs over the current pooling of risk in the
health insurance exchange.
Arin J. Carmack
Wellness Programs:
House Bill 4072:
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