By Gaurav Bhola, MSM, Managing Editor
Tuesday, August 14, 200
As health insurance costs multiply, the companies that provide healthcare to their employees are seeing their expenses skyrocket. Some companies are trying innovative solutions to arrest healthcare costs.
In June, Clarian, an Indianapolis-based hospital system took an unusual aggressive step towards curbing its employee health insurance costs. Starting in 2009, Clarian will fine employees per paycheck if they don’t meet certain criterion. The criterion is set forth and enforced by Clarian, a historic step for any company.
Hence, by logical assessment Clarian Health will be:
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Creator of the criterion
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Administrator of set criterion
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Enforcer of set criterion
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Arbitrator of set criterion
It would be interesting to see if employees have an alternative for independent dispute resolution.
Next year, when the new healthcare penalty plan is implemented employees will be fined for every criteria infraction. For example, employees will be fined $10 per paycheck if their body mass index (BMI) is over 30, and fined $5 for every excess level of glucose, blood pressure, and cholesterol, as well as for smoking.
Many companies around the nation will be paying attention to how Clarian’s health insurance reduction plan plays out. Most likely companies will measure Clarian’s results in employee satisfaction, retention, healthcare insurance cost savings, among other factors before replacing existing healthcare programs.
Currently, employees are offered incentives instead of penalties to lower healthcare costs, a carrot as opposed to Clarian’s stick method. Employers offer wellness programs, giving employees the incentive to cultivate good habits to improve health. The wellness programs include quitting smoking, weight loss, weight maintenance, and others that are proactive and preventative in nature.
Recently this year the federal government issued regulations and guidelines relating to wellness programs. Since July 1 wellness program rules complied with nondiscrimination conditions of the Health Insurance Portability & Accountability Act (HIPAA).
The new regulations define the boundaries for employers with regards to rewards or penalties predicated on explicit health outcomes. The employers had always been afraid of being held liable for discrimination if they implemented a Clarian type insurance plan, which is no longer the case.
Nonetheless, hopefully employers will not step over the boundaries set by the new rules into the realm of employee abuse. Where does Clarian’s healthcare plan lie? When the healthcare plan’s criterion is too obtrusive of employees’ personal space?
At present, individual health insurance offered by a health insurance company is still not an affordable healthcare insurance plan option for the average middle income American, if it were then employees would have palatable alternatives to stringent plans like Clarian. A reward based healthcare plan is always more appealing to employees; penalty plans create resentment.
Also, how will Clarian’s health plan treat employees who don’t meet the strict health criteria’s due to medical reasons or genetics? This and more has to be asked; the employer and employee interest has to be balanced out. So far, the scale is tilted in the employer’s favor.
