healthcare costs

Get Fit and Pocket Up to $1,200 With Employer Wellness Programs

Julie Rains — Wed, 27 Feb 2013 11:24:32 +0000

You may be able to pocket some serious cash if you get serious about your health. Wellness incentives at many employers are becoming financially attractive and worth the time, effort, and sweat to earn them. (See also: Fitness for People Who Hate Exercise)

For example, employees at a client organization of the Principal Wellness Company can save $1,200 yearly in health insurance premiums, plus an extra $1,200 for a covered spouse or partner. Though that deal is one of the most generous I’ve heard of, incentives offered by other companies can mean easy money, especially if you are already fit and healthy. Recently, a relative made $150 for achieving health criteria and a friend of a wellness coordinator friend won approximately $300 in gift cards just by logging her fitness activities.

You too may be able to parlay healthy behaviors into cash.

The Types of Incentives You Can Earn Through Wellness

Get started in earning money by learning about the wellness programs offered by your employer and your insurance company. Generally, incentives fall into these categories:

Lower health insurance premiums
Lower deductibles and co-pays
Contributions to Health Savings Accounts (HSAs) or Health Reimbursement Accounts (HRAs)
Cash bonuses
Non-cash financial incentives such as gift cards, prizes, or gym memberships
Paid time off (extra vacation days or a few hours off from work)
Allotted time for participation in wellness programs, such as seminars

As employers move from traditional PPO plans to High Deductible Health Plans (HDHPs) or take other actions to control expenses, they are also offering wellness programs to help employees (and themselves) save money on medical bills, according to Lee Dukes, President of Principal Wellness Company. Better health often means fewer costs associated with the treatment of lifestyle-related diseases, saving money that can be shared among employers and employees.

Wellness programs and their incentives are often linked to health insurance plans. However, some businesses may offer wellness programs and prizes not directly related to insurance benefits. These may include lunchtime walking groups, cash prizes for weight loss, and onsite massage.

How to Qualify for Wellness Incentives: Participation vs. Achievement

There are two main ways to earn incentive dollars or benefits. Some programs require only that you participate to qualify. Others distribute cash only if you achieve certain health outcomes.

For example, the friend of a friend I mentioned above won gift cards by participating in fitness activities and recording them on a website maintained by her insurance carrier. She didn’t have to achieve a specific result, such as reducing her blood pressure or losing 10 pounds. She may have improved her health as a byproduct of these activities, but that’s not what qualified her for the prizes.

On the other hand, my relative had to achieve certain health criteria to get a cash payout. For each measure that came under the threshold established by the company (such as BMI below 25, blood pressure below 120/80, and total cholesterol under 200), he qualified for $50. Notably, he could earn partial rewards even if he didn't meet the standards in all categories. Also, the minutes of exercise he completed or the diet he followed was irrelevant to earning the incentives, although certainly those factors could influence the outcomes.

Lee tells me that many companies launch wellness programs with participatory screenings or activities and transition to outcome-based rewards in subsequent years. He also mentions that because some biometric measures (such as blood pressure readings) may fluctuate during the day, higher value and more sophisticated programs (like the one that knocks $1,200 off the annual health insurance premium) measure multiple factors related to risk of metabolic syndrome.

How to Achieve Health Targets

You may achieve desired health outcomes without any extra effort on your part if you already exercise and eat well. That is, your measures are consistently within target ranges:

Blood pressure equal to or less than 120/80 mmHg
Fasting blood sugar (glucose) less than 100 mg/dL
Waist circumference (length around the waist) of less than 40 inches for men and less than 35 inches for women
HDL cholesterol of more than 60 mg/dL
Triglycerides of 149 mg/dl or less

Change Isn't Easy

Some people are disappointed to learn that they are not as healthy as they presumed, Davis Liu, M.D., a practicing board-certified family physician and author of "The Thrifty Patient" tells me. When patients try to earn wellness incentives, they may find that their numbers fall outside of healthy ranges, and they need to make changes to qualify for the lower-cost health insurance or bonus dollars.

Changes in habits are often difficult to make. Davis recommends taking small steps toward goals. Many people fail at their efforts because they are too aggressive and sudden; radical changes are often not sustainable.

Multiple minor adjustments work well to achieve long-lasting lifestyle changes. He often advises patients to use a framework from the book "Living SMART: Five Essential Skills to Change Your Health Habits Forever" that involves setting a simple goal, monitoring your progress, arranging the environment (and your schedule) to be successful, recruiting help or finding a buddy to join you, rewarding yourself (though preferably not with food), and repeating this process.

Specific advice includes:

Control portion sizes (see how portion sizes have changed from years ago) and turn down second helpings
Increase your consumption of fruit and vegetables to move toward a plant-based diet
Walk 30 minutes a day several times each week (one of the cheapest forms of exercise) or, if you are just getting started, exercise 5 or 10 minutes for a couple of times each week
Cut out excess liquid calories such as beer and soda
Use apps such as Lose It or Moves to record activity and motivate yourself

If you are trying to achieve a certain target, consider starting a couple of months before formal assessments for health criteria are taken. In Davis’s experience, new habits may take as long as six to eight weeks to take hold and results tend to follow within this timeframe.

Tax and Other Rules to Know About Wellness Incentives

Wellness incentives tied to health insurance policies are restricted. For example, premiums can be reduced by just 20% (though that percentage increases to 30% in 2014). Still, on a $5,000 policy, you could pocket an extra $1,000 by being healthy and achieving wellness goals.

You should also know that you may be liable for taxes on certain incentives, like cash bonuses. My wellness coordinator friend tells me that her employer "grosses up" these awards so that employees get the cash amount advertised regardless of tax bracket. Other employers, though, may simply include the amount in your check and deduct taxes accordingly.

If you happen to score on reduced health insurance premiums that are taken out of your paycheck on a pre-tax basis, then your tax liability may be slightly higher because you are paying less for insurance. However, you may be able to apply these savings to an HSA or retirement account with tax advantages and keep your tax liability down.

Being fit and healthy is reward itself. But it’s nice to be able to make extra cash, get time off, or win prizes for maintaining or improving your well-being.

Have you earned wellness incentives? Was the effort worth the reward? Tell us about your experiences.

Like this article? Pin it!

This article is from Julie Rains of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Healthcare Price Lists: A Short (but Useful) Guide

Julie Rains — Thu, 04 Oct 2012 10:36:58 +0000

Consumers are taking on more and more responsibility for controlling their own healthcare costs. Many people have high-deductible health plans or consumer-directed health plans that come with high deductibles and high out-of-pocket expense caps, ranging from $1,250 (self-only) to $12,500 (family) in 2013. (See also: The Types of Insurance Plans)

According to a survey by the Kaiser Family Foundation and the Health Education Research Trust, 19% of people with employer-sponsored plans have an HDHP with a savings option (HDHP/SO). That percentage is expected to grow as more employers shift to these plans or expand offerings to include them in benefit packages. You may be one of those people, or you may want to control expenses even if you are not directly responsible for paying medical bills.

But when consumers try to control costs, there's a problem — getting prices from providers can be difficult and time-consuming. And, unlike your mechanic, healthcare providers typically don't give cost estimates before proceeding with a diagnostic or treatment. Sure, you can see pricing after you use services and get a bill. But to control expenses, you need to know the price of office visits, screenings, tests, surgeries, medications, and more before receiving services.

Asking about pricing from providers, such as doctor’s offices, hospitals, and screening facilities, is a simple and straightforward tactic. Occasionally, that approach works. But in my experience, staff members are often elusive about prices. They act alternatively fearful, confused, and guarded, seeming scared of the possibility of dispensing inaccurate information, unsure about what price they should give (list price, negotiated price, or billed price, which may vary by insurance company and plan type), and defensive regarding the value of services being rendered.

Fortunately, price lists are becoming more commonplace. Here are resources with useful information.

Fair Health

Fair Health has a consumer cost lookup feature at its website, fairhealthconsumer.org. Enter your location and select a procedure to get an estimate of the initial charge, reimbursement, and out-of-pocket cost. Based on my experience, the results seem accurate. Note that you are limited to a certain number of searches.

Healthcare Blue Book

Among useful web resources for saving money on healthcare is Healthcare Blue Book. You can get price information plus guidelines on possible price variations throughout the country. Search results break out facility and professional fees when applicable.

Clear Health Costs

You can find general information on healthcare costs by state and city as well as the lowest and highest prices of certain services by providers in New York at Clear Health Costs. The site collects and shares prices provided by consumers.

Leslie’s List

Davis Liu, M.D., a practicing board-certified family physician pointed me to Leslie's List as a source of price information. Pricing is available for diagnostic testing services and prescriptions in Chicago and Dallas.

Health Warehouse

You can check out prices and order medications at healthwarehouse.com, a U.S.-based pharmacy mentioned by Dr. Liu in his book, "The Thrifty Patient: Vital Insider Tips to Staying Healthy and Saving Money."

Provider Websites

Some healthcare providers post price lists or ranges on their websites. You can see how much an office visit and strep test cost at Minute Clinic or the price of a colonoscopy at Dartmouth-Hitchcock Medical Center.

Insurance Companies

My healthcare insurance company has a tool that allows me to look up prices for office visits, procedures, and other services. Results indicate a range of prices for negotiated rates and out-of-pocket costs (though this number does not include co-pay amounts).

These sites and others like them can help you to:

Plan your consumption of healthcare.
Set aside money in a Health Savings Account (HSA) if you have an HDHP or determine how much to save in a Flexible Spending Account (FSA) or a regular savings account even if you do not have an HDHP.
Determine the cost-benefit of a proposed procedure or treatment.
Compare costs at different providers.
Save money by choosing lower-cost providers if appropriate or negotiating a lower rate.

Have you consulted a price list for healthcare services?

This article is from Julie Rains of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Ways to Contain Rising Healthcare Costs

Barbara Weltman — Wed, 21 Dec 2011 23:52:57 +0000

Link:

http://www.openforum.com/articles/5-ways-to-contain-rising-healthcare-costs

Healthcare costs continue to rise, even skyrocketing for some businesses. Premiums for small businesses have grown by 113 percent in the last decade. Despite passage of the Patient Protection and Affordable Care Act (“Obamacare”) last year, there is no premium relief in sight. However, there are still actions you can take to provide the care you want for your staff to keep them healthy and protected without causing you financial hardship.

1. Check Your Plan Options

Health insurance doesn’t mean that you must have the Cadillac of plans to cover every health need. Such plans are very expensive. There are other types of plans, such as HMOs, that provide less costly coverage.

Some states may offer state-sponsored plans for small businesses and sole proprietors. For example, New York’s HealthyNY.com provides an option for small businesses and sole proprietors that meet certain income limits. Massachusetts, with its health care mandate, has a HealthCareConnector for employers to find affordable coverage within the state; eligible small businesses can save 15 percent by joining a wellness health care track.

Discuss your needs with an insurance agent who can offer a variety of health care plans. Or do your own research using the small employer health care finder from HealthCare.gov. The finder lets you search your options by zip code.

2. Tweak Your Coverage

One way to keep premiums down is to increase the portion of costs borne by employees, including deductibles and co-payments. To maintain premiums, you probably need to hike these out-of-pocket costs. While it will cost more to visit a doctor or obtain a medication, at least you’ll be able to retain coverage for your staff. Again, you’ll want to discuss the impact that proposed changes will have on your premiums. Obviously, once you make decisions, share them with your staff.

3. Share Costs

Many small business owners would love to pay for all of their employees’ coverage but just can’t do it financially. They’re forced to share the responsibility for paying for coverage. Some cost-sharing options to consider:

You pay the cost of coverage for an employee. Anyone who wants to add family coverage pays the additional cost;
You share the cost of coverage in some way (e.g., 50/50);
You give employees a dollar allotment and they choose the type of coverage they want from options you provide, paying any additional costs.

Important: The cost-sharing option you choose may impact your eligibility for a federal tax credit, explained later.

4. Use Consumer-Driven Plans

There is a growing trend toward consumer-driven plans because of the money that can be saved by the company. As of January 2011, there were 11.4 million people using health savings accounts (HSAs) (explained below). HSAs and health reimbursement arrangements (HRAs) are plans that combine a personal account with a high-deductible (low cost) health plan (HDHP) in which the first dollars of care are borne by the employees. Once the deductible is met, the insurance operates like regular insurance.

Out-of-pocket medical costs can be paid through a couple of different accounts.

HSAs. These allow the employer, employee, or a combination of both to make tax-deductible contributions (within IRS-set limits). The funds grow on a tax-deferred basis and withdrawals for qualified medical costs are not taxable. There is no use-it-or-lose-it feature, so if employees don’t use up their account funds, they can use the funds in later years. If they leave the company, they take the accounts with them.
HRAs. These are employer-funded plans that cover employee’s out-of-pocket costs up to a dollar limit set by the company. Unused amounts carry over to the following year, but accounts are not portable; employees lose this benefit when they leave the company.

5. Take Advantage of the Federal Tax Credit

The small employer health insurance credit allows you to offset your federal income tax liability by 35 percent of the cost of the premiums you pay for your staff. When enacted last year, the government had expected 4 million small businesses to use the credit, but as of mid-October 2011, only 309,000 had done so, in part because many were unaware of its existence.

To qualify for the credit, you must meet all of the following conditions.

You pay at least 50 percent of the cost of the premiums for employees.
You have fewer than 25 full-time equivalent (FTE) employees. You may be able to meet this condition even if you have more than 25 employees because owners and their relatives who are employees are not counted.
The average annual wages for your FTEs are less than $50,000 per FTE.

The maximum credit applies if you have fewer than 10 FTEs with average wages under $25,000; a partial credit applies for more FTEs with higher wages until you hit the limits above. There are other limitations, restrictions, and requirements for the credit. Learn more in the instructions to IRS Form 8941.

More Resources

Handling the issue of health care coverage for your business can seem monumental. However, there are plenty of resources that can help. Here are two.

IRS Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans (it has not been updated for 2011 and 2012, but still provides valuable, general information about plan types).
MyVenturePad’s free webinar on Rising Costs, Unclear Mandates.

This article is from Barbara Weltman of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: