Survey finds employees pay greater share of health costs, and most large employers penalize them for using tobacco

As large employers respond to changes influenced by health care reform and rising costs of care, employees are paying a greater portion of their health-care costs. That trend that is likely to continue over the next few years, says a new report on employer-based health plans.

Although employers cover most costs of work-based plans, employees contribute 42 percent more for health coverage than they did five years ago, while employers paid 32 percent more, according to the study from the benefits consultant Towers Watson and the National Business Group on Health. Overall, costs went up 34.4 percent.

When employers were asked if they thought health plans would change by 2018, which is the year the excise tax on high-cost plans takes effect, 92 percent said plans would be different, and nearly half said they expect a significant or transformative change. Such change will increase both accountability and engagement for employees.

% of large employers saying they were "very confident" they would offer health benefits in 2022

Nearly two-thirds of employers surveyed offer employees financial rewards to encourage participation in health programs, according to the report, which said tying employee contributions to successful completion of specific tasks, such as health assessments and screenings, remains the most popular contribution strategy. Growth in the use of penalties to engage employees in health-program participation has slowed over the last two years, but the use of surcharges for tobacco use continues to grow. By 2014, 62 percent of surveyed companies are expected to apply tobacco-use surcharges.

"While U.S. employers remain committed to health care benefits for active employees over the next five years," the report says, "they are redifining their financial commitment in the short run and are more reluctant to commit to coverage for employees over a longer period."

The 18th annual Towers Watson/National Business Group on Health Employer Survey on Purchasing Value in Health Care tracks employers' strategies and practices. It was completed by 583 employers,between November 2012 and January 2013. The report says it identifies the actions of the best performing companies as well as current trends in health-care benefit programs of U.S. employers with at least 1,000 employees. Survey respondents collectively employ 11.3 million full-time employees and have 8.5 million employees enrolled in their health care programs. Download a report PDF by clicking here.

Report: 110,000 Ky. youth 16 to 24 aren't in school or employed; state's rate of 'disconnected youth' exceeds U.S. average

Almost 110,000 teens and young adults in Kentucky are not enrolled in school and are not employed, even part-time, according to a new Kids Count report from the Annie E. Casey Foundation.  Nationwide, the number reaches nearly 6.5 million. In Kentucky between 2000 and 2011 the number of 16-19 year-olds not in school and not employed rose by 3 percent, but the number of idle young adults ages 20-24 climbed by a whopping 88 percent. Both rates exceed the national rate. (Getty Images)

The Kids Count report, "Youth and Work: Restoring Teen and Young Adult Connections to Opportunity," termed these 16- to 24-year-olds "disconnected." It found that they face many obstacles on their path to securing a stable financial future. For starters, many haven't finished high school and are competing with older Americans for the few entry-level jobs. In addition, they lack skills for higher-paying jobs. Many are poor and have attended under-performing schools. The report explains that, as such, this group can present a significant cost to taxpayers. (Read more) View the report here.

N. Ky. Chamber to ask state for more funding to fight heroin; London police make first known heroin trafficking arrests there

The Northern Kentucky Chamber of Commerce is planning to lobby the state for more funding for heroin treatment after receiving reports from business and law enforcement about the breadth and depth of the drug problem in the region. Terry DeMio of the Cincinnati Enquirer reports that the chamber's Geraldyn Isler says the area has the “highest volume of people in the state needing substance abuse treatment but is receiving the least amount of funding.”

According to the Northern Kentucky Drug Strike Force, 63 percent of heroin possession and trafficking prosecutions in Kentucky are in Boone, Kenton and Campbell counties, the three urbanized counties in the region. A 2007 University of Kentucky study that shows that the region led the commonwealth in people needing substance abuse treatment, but that it also received the lowest per capita funding from staff coffers for those mental health services for more than a decade.

The chamber told DeMio there are many "hidden costs" to such abuse. Among those costs: increased employee absenteeism, tardiness, job-related injuries and errors. It also notes employee-employer conflict, greater health-insurance costs and crime as likely outcomes of heroin in the region.  (Read more)

There could be other requests for more funding for heroin treatment. This week the London Police Department made the first known arrests for heroin trafficking in Laurel County, The Sentinel-Echo reports.

Wellness programs looking good as business investments

Businesses should like these numbers a lot: Invest $1, get $3 back. That's the latest math on the return on employee wellness programs and experts are saying that may just be the start for the financial returns they can expect from targeted prevention efforts. Mark Green of The Lane Report writes that no less of an expert than Dr. William Frist of Nashville -- doctor, policy specialist, former U.S. Senate majority leader and venture capitalist -- has said: “No question in my mind, if we are to invest a dollar to have the greatest value in terms of outcome and results, we should put that dollar in prevention and wellness."

Frist, reports Green, "is a strong advocate of wellness -- as a business practice to adopt and a business sector to be in. Individual doctors, hospitals and the entire healthcare industry need to get involved, he said." Frist broke down for Green what factors most determine how long someone lives: “The numbers break down 30 percent genetic, 5 percent environmental, 15 percent socioeconomic, which is surprising to a lot of people, and then 40 percent behavioral: wellness, prevention. And then what is left (10 percent) is who your doctor is, what hospital you go to, what your emergency room is.” Those numbers  are important to Frist because to impact longevity healthcare spending over time, he said, resources should be on the 40-percent sector: behavior, wellness and prevention. Think smoking programs, weight loss, exercise, nutrition, seatbelt use. (Read more)

Annual report for Cincinnati-Northern Kentucky region shows employee health care costs there will go up about $400 next year

In an continuing effort to move health costs off the shoulders of employers and onto employees, workers in Greater Cincinnati and Northern Kentucky will likely pay an average $4,775 out of their own pockets for health care in 2013 -- about $400 more than this year. That's nearly $2,000 more than they paid in 2007. The payments include premiums through their employer, as well as office co-pays and deductibles, said Aon Hewitt, the consultant that produced its annual cost report. These payments are slightly less than the national average of $4,814.

The trend toward "more employee accountability" means that nearly all companies are adjusting the designs of their employee plans, adding wellness programs and moving more employees to high-deductible plans with health savings accounts, reports Cliff Peale of the Cincinnati Enquirer. Penalties are now common for workers who smoke or who don’t take required health screenings.

The report notes that companies continue to bear most of the cost of their employees’ health insurance. It also predicts that, counting the portion paid by both companies and workers, the cost of a health care policy will increase 6.4 percent next year to $11,566. That should return the region to numbers more aligned with the national average. About half of all Americans still get benefits through their employers, and there are nearly 50 million without health insurance at all. (Read more)

Study: Small business owners see bottom-line benefit from employee health and wellness programs

A study of small businesses has found that three out of four offering health and wellness programs to their employees believe the initiatives are good for their bottom line. The study, conducted by the National Small Business Association and Humana Inc., asked more than 1,000 small-business owners about their employees' health and wellness needs and what barriers they face in supplying them.  An overwhelming 93 percent said they considered their employees’ physical and mental health to be important to their financial results.

However, only one-third expressed confidence in their ability to help employees manage their well-being with initiatives aimed at encouraging them to make healthier choices such as getting preventative care, eating right and exercising.

Another key finding was that more than half of the small-business owners reported that they did not have sufficient information to introduce health and wellness programs to their employees. On the other hand, startups -- those companies less than 10 years old -- found ways to do so, with 63 percent having already adopted health and wellness programs.

“Wellness solutions likely will be an increasingly important part of the employee value proposition,” said Jerry Ganoni, President of Humana’s Small Business Division. “It will be crucial for the industry to focus on providing small-business owners with the information they need to make the wellness decisions necessary to recruit and retain employees while making an a meaningful impact on their bottom lines.”  (Read more, from The Lane Report)

Health reform's exchange won't attract many new insurers to Ky. because it's a small, sickly state, former Medicaid boss says

Kentucky is unlikely to attract many new insurance companies when it starts its Health Benefits Exchange a year from now, a former state Medicaid commissioner told Dawn Marie Yankeelov for a story in The Lane Report.

“Kentucky is not a big attractor,” said Elizabeth Ann Johnson, a lawyer with Stites and Harbison in Lexington office. “We are a small state for insurers, and we have a sicker population statistically – we see high Medicaid use. I would be surprised to see new players flood into the state.”

The exchange, required by the federal health-reform law, will be a "web-based marketplace that includes information necessary so Kentuckians can compare price and quality as they shop for health insurance," Yankeelov notes. "It also will assist employers in facilitating enrollment of their employees into health plans, enable individuals to receive insurance-premium tax credits and subsidies, and qualify small businesses for tax credits. . . . The average employer and employee in Kentucky will be able to find information on the exchange through a planned Navigators program, an outreach and education program that will be staffed by employees trained and certified to discuss the exchange."

University of Kentucky researchers have estimated that as many as 2.4 million Kentuckians may use the exchange. "The high end of this estimate includes approximately 1.4 million individuals currently receiving employer-sponsored insurance through their large employers," Yankeelov notes. Her story has other good background information on the law, the exchange and the problem of the uninsured, who make up about 15 percent of Kentucky's population. Read it here.

Should companies refuse to hire employees who smoke? Opposing views outlined

The growing controversy surrounding companies who refuse to hire employees who smoke is featured in two opposing opinion pieces in USA Today.

Paul Terpeluk, medical director of employee health services at Cleveland Clinic, explains why the policy makes sense for his company. "Consider that cigarette smoke contains hundreds of chemicals and compounds that are toxic and at least 69 that cause cancer," he writes. "To ignore this would be to undermine our commitment to health and wellness, which includes providing a healthy environment for our employees, visitors and patients. Plus, the policy has not proved to be an overwhelming obstacle for job applicants. Since it was instituted, less than 2 percent of job offers — about 300 out of 20,000 — have been rescinded due to positive nicotine tests." (Read more)

But a USA Today editorial expresses a different view, in response to Baylor Health Care System's move to stop hiring workers who smoke. "Intruding this deeply into people's privates lives raises questions that bear scrutiny," it reads. "Companies can charge smokers more for health coverage or ban smoking on the job. But punishing people for using a legal product on their own time crosses a troubling line."

The editorial makes an exception for health-care companies who want to practice what they preach. "But such practices are not confined to the health care industry, and they raise a broader issue: If employers routinely reject people who engage in risky, but legal, behavior on their own time, what about such things are overeating or drinking too much alcohol?" (Read more)