How to use data to customize your health plan and control costs

“In today’s health care market, data can be used as a valuable resource to control costs. By examining customized financial data sets, it’s possible to determine where heath care dollars are being spent and where there is potential waste,” says Brian Fallon, regional vice president of Network Management & Business Development at HealthLink Inc.

Smart Business spoke with Fallon about how employers can use data to build a customized health plan and control costs.

Why is data so valuable?

Health care spending can be analyzed in terms of fixed and variable costs. Fixed costs include administrative costs such as third-party administrator charges, network access fees and the premium for stop loss insurance. Variable costs are just that, variable, and include claim utilization cost incurred by covered members/their dependents, and are impacted by plan design, demographics and the health of the member population served.

Data allows fixed costs to be analyzed in order to find opportunities for saving. But more importantly, data allows you to look at variable cost. You can discover where costs are coming from, and if there are underlying root issues. Then, you have the opportunity to predict variable costs and, using custom plan design strategies and cost containment programs, control health care spending.

Does this only work for self-funded plans?

Historically, yes. For employer groups with less than 100 lives, fully insured employers receive a monthly list bill with premiums owed. Since the carrier assumes the risk and pools it with other employer groups, there is little, if any, reporting. Fully insured groups with greater than 100 employees receive some reporting but the availability varies among carriers. Typically, the greater the enrollment the greater the reporting, because once an employer reaches a certain size, there is less dependency on the risk pool and greater consideration of an employer’s own data.

The customization and flexibility of self-funded arrangements, coupled with the fact that a self-funded plan is the employer’s plan, not the carriers, make them ideal for utilizing data to drive more cost-effective outcomes. The chosen programs and services can be customized for the employer — the plan is theirs, the programs are theirs and the savings is theirs.

Is using data to this extent a recent trend?

Using data to look at costs has always been important and a major benefit of self-funding, but changes, such as Affordable Care Act mandates and the removal of lifetime maximums, have facilitated a more aggressive approach.

How can employers use customized data to examine their health care dollars?

Examining data in this way isn’t a product employers just purchase and apply. It’s a process — and the process starts with availability of data. This depends on whom an employer is working with, how transparent the company is willing to be and the degree of creditability within the data.

Some areas that should be examined are ages within the group, top diagnoses and incidences of high-cost medical conditions. Also, consider non-clinical data — out-of-network and emergency room usage — to see if it is a factor of high spending.

Once there’s concrete understanding of the health plan and member population, your advisers can show you how to proactively manage risks. The best way to affect outcomes is a collaborative relationship between all the required parties needed to design and administer a benefit plan. There are also new opportunities with providers who are willing to collaborate in shared risk agreements.

What else do employers need to know?

How data is presented can be as unique as the network or carrier itself. Discrepancies can distort accuracy, so employers need to understand what the data actually entails. They should know the difference between repriced and actual paid data, how current the data is, whether or not it has duplicates and, when looking at discount data, the facility level discounts. It’s also critical to review the facilities’ case mix indexing and the cost to charge ratios. These components can affect the data, the analysis, and ultimately, the conclusions.

Insights Health Care is brought to you by HealthLink

How organizations can benefit from self-funding employee health plans

How to fund health benefits is a major decision for any organization. There are two options — get fully insured through a health insurance carrier or fund it themselves. Until recently, self-funding was only considered for large organizations due to the potential risk involved, but that’s changing.

In fact, according to Pricewaterhouse Cooper’s 2015 Health and Well-being Touchstone Survey, 66 percent of employers with 500 to 1,000 employees are now self-funding their health benefits. That’s up 7 percent from the previous year and up 11 percent compared with 2013.

“Self-funding can be a very effective way for some businesses to control the cost of health care,” says Amber Hulme, Medical Mutual vice president of Central and Southern Ohio. “But it’s definitely not for everyone. Organizations need to evaluate their options carefully to make the right decision.”

Smart Business spoke with Hulme about the basics of self-funded health plans, how organizations might benefit from the approach, and what factors need to be considered before making a switch.

Why has self-funding grown recently?

A decade ago, self-funding was primarily utilized by employers with at least 500 employees. Now, more insurance carriers, including Medical Mutual, have introduced self-funded products for organizations with as few as 50 employees.

In 2018, many small businesses are scheduled to lose the transitional or ‘grandmothered’ status that has kept them exempt from some aspects of the Affordable Care Act. In preparation, even businesses with as few as 10 employees are evaluating the benefits of self-funding.

How does it generally work?

With self-funding, organizations budget for and pay the claims for all employees covered by the plan and any covered dependents, plus administrative fees. Most employers also pay for stop-loss insurance, which limits risk when one employee has a catastrophic claim, as well as when claims for the entire organization are higher than a set amount.

It’s basically the alternative to being fully insured, where the insurance carrier charges a premium and pays the claims — thereby assuming all the risk.

What are the benefits?

Organizations usually decide to be self-funded because it lets them predict costs based on their specific claims history and make any necessary adjustments. If claims are lower than expected, they can invest that money in the business or offer incentives for employee wellness. If claims are higher, their stop-loss insurance can cover it.

There also can be tax advantages to self-funding. Under health care reform, there are certain taxes related to risk that only apply to fully insured health plans. By moving to self-funding, organizations hope to eliminate some of those taxes from their budget.

When isn’t self-funding a good option?

Self-funding introduces more risk, so it’s usually geared toward organizations with more predictable claims. That’s why organizations need to be familiar with their claims history and understand the overall health of their employees when they are making this decision. If the population is relatively unhealthy, for example, self-funding might be a challenge.

Another important factor to think about is their financial flexibility. Some organizations simply don’t have the cash flow available to cover unexpected claims if they come up. Others may need to know their costs ahead of time, and prefer the predictability of being fully insured.

What other factors should be considered?

Self-funding isn’t a short-term solution. It requires a full commitment and a long-term strategy. To actually control costs through self-funding, organizations need to manage their claims effectively. That means committing to keeping their employees healthy through wellness and disease management programs, as well as negotiating with health care providers.

It’s also critical for organizations to know exactly what’s in their contract — and to work with an insurance carrier or a third-party administrator they can trust.

Insights Health Care is brought to you by Medical Mutual

Selecting the right wellness vendor takes careful study

Wellness programs have become a staple of American companies over the past two decades. A 2012 study by Rand Corp. showed that 51 percent of all employers with 50 or more employees reported that they offered wellness programs.

The foundation for workplace wellness programs actually goes back to the 1970s, when government entities such as the National Institute for Occupational Safety and Health and the Occupational Safety and Health Administration were created to help ensure safe, healthful working conditions.

Over the past 20 years, the popularity of wellness programs has intensified, especially as health care costs have risen. But not all wellness programs are created equal as companies are finding out. Choosing the one that best suits a specific company can be a challenge.

“The characteristics and quality of health management and wellness programs can vary considerably,” says Stephen T. Doyle, senior director of Strategic Health Management Solutions at UPMC WorkPartners. “Business owners should make a careful study of their options before selecting a wellness vendor.”

Smart Business spoke with Doyle about what employers should look for in a wellness program.

What is the future of wellness programs?

It is obvious that with health care costs on the rise and participation-based incentives losing some effectiveness, the emphasis is shifting to programs that provide incentives (or disincentives) based on outcomes. Recent employer surveys have shown 52 percent of employers had outcomes-based incentives for tobacco use in 2013, and 33 percent offered outcomes-based incentives for biometric screening values such as weight, blood pressure and cholesterol.

To ensure continued participation and to maintain program momentum and success, programs often need to make significant shifts toward outcomes-based incentives.

What are some characteristics of successful incentive wellness programs that employers should look for?

An effective incentive program can be a powerful strategy for engaging employees and motivating behavioral change. However, while many programs may provide incentive strategies for specific behaviors, often these will fall short of addressing the whole population, given individuals’ specific health concerns or needs.

Each employer’s needs are different, and, therefore, wellness and health management providers need to be able to tailor programs to accommodate an organization’s particular needs.

Should wellness programs be integrated with other employee benefits?

Wellness and health management programs produce optimal results when integrated with an organization’s medical benefits. Integrating all employee benefits allows for seamless coordination of benefits and can provide the most complete picture possible of the health of the employee population, which in turn can help guide program direction and development.

Professionally trained and credentialed staff is needed to produce the best service. Ideally, staff should be involved in ongoing training and education initiatives.

In addition, a wellness and health management program provider should be readily accessible in the same geographic region as an employer. This allows for the most responsive service delivery and face-to-face interaction with employers and employees as needed.

Regular, customized reporting that summarizes employee utilization of programs and its impact on the organization is essential.

Are wellness programs the final answer to improving overall workplace health?

Achieving widespread and significant improvements in health risk levels, especially among workers at risk for chronic diseases, may require more than financially incentivized workplace wellness programs. Other workplace modifications — such as on-site health clinics and lifestyle and disease management health coaches on-site — may be needed to enhance the impact of workplace wellness programs.

Insights Health Care is brought to you by UPMC Health Plan

How fitness trackers can motivate employees to be more active

Fitness trackers are popular tools for consumers to monitor their physical activity. According to the Health Enhancement Research Organization, almost half of employers have introduced some version of the device into their wellness program — from simple pedometers to more advanced options.

By 2018, ABI Research predicts that employees will use more than 13 million devices as part of a workplace wellness program.

“Incorporating fitness trackers into a wellness program is a good way to create a long-term culture of health within an organization,” says Veronica Hawkins, Medical Mutual vice president of Government Accounts. “They can help employees stay healthy, plus counteract rising health care costs.”

Smart Business spoke with Hawkins about the benefits of integrating fitness trackers into an employee wellness program, how to encourage participation and why many workers have already embraced the devices as part of their daily physical activity — both at work and at home.

Why are fitness trackers getting so popular?

They can be very useful tools to help people manage their lifestyle. Walking is one of the best ways to get and stay fit, but most people don’t know how much they actually do in a day.

While pedometers served that purpose in the past, the new devices can do a lot more. They typically show your progress in real time, on a smartphone, tablet or computer. So it’s easier, and more fun, for users to track their progress to meet their goals — and eventually, to set new ones.

How can organizations take advantage?

Fitness trackers can usually be integrated into an existing wellness program, where there are multiple opportunities for employees to earn wellness incentives. Through various challenges, employees log data and receive messaging about their progress from their employer as well as the vendor. Employees start connecting online with co-workers, often leading to friendly competition that drives engagement.

Some organizations may even pay for the devices to encourage employees to get started.

What about incentives?

There are definitely a variety of strategies organizations can use, but it really depends on what’s going to motivate their particular employees. Some organizations might offer a day off for meeting a weekly or monthly step goal, or give out monetary incentives like gift cards.

Medical Mutual, which introduced the devices to its wellness program two years ago, contributes money into employee health savings accounts for meeting various step goals.

What else can make the process successful?

The goal of introducing fitness trackers to a wellness program is to help employees reach their fitness goals. But it’s also to affect real behavioral changes that become part of their life style.

To do that, organizations just need to make their programs fun and engaging. Simplicity is also important. The easier it is for employees to participate, the more sustainable any behavioral changes will be.

Are there common obstacles?

With the popularity of fitness trackers, employees are often excited to participate. But there can be concerns about privacy and sharing information with employers. It’s important to be clear with employees that the information is being used to benefit them, not penalize them. And, that only information relevant to the program, like total steps, will be tracked.

There are usually consent agreements employees have to sign to share their data, so they have a choice. But in most cases, this issue isn’t a significant barrier.

What are the first steps?

If organizations want to invest in fitness trackers for their wellness program, it’s a good idea to start with their insurance carrier. Many already have direct partnerships with companies that either make or distribute some type of wearable activity tracking device. There are usually opportunities for discounts, as well as additional benefits.

Insights Health Care is brought to you by Medical Mutual

Weighing the potential of wearable fitness technology

It’s only a gadget that attaches to someone’s wrist but it could be the future of health insurance. Or, it represents a major overreach by insurers and raises serious privacy issues.

“Devices that measure physical activity, heart rate, caloric expenditure and other biometric measures, often referred to as ‘wearable fitness technology,’ hold the promise of dramatically changing the face of the health care industry,” says Stephen T. Doyle, senior director of Strategic Health Management Solutions at UPMC Health Plan. “But we have to remember that this is innovation that is not without some risks.”

Smart Business spoke with Doyle about the potential of wearable technology and what employers might like and not like about it.

What about wearable technology is attractive to insurers?

With wearable technology, there is potential for accurate, real-time data. It can provide a continuous validation of an individual’s daily health behaviors, which over time build to define his or her overall health. These devices have the capacity to collect data in several areas, including physical activity, eating and sleep patterns. They provide relevant and customized feedback to end users, showing them areas where they’re doing well and areas of opportunity for them to improve.

Most devices function like a health coach or a trainer would from a goal-setting, monitoring and feedback perspective, but their added value comes from the fact that they’re always with you.

How likely is it that wearables will become popular enough to have an impact?

According to Pricewaterhouse Coopers, an estimated 20 percent of Americans currently own a wearable device. Of these users many are young. Millennials make up more than 50 percent of the population, and 53 percent of millennials say they’re excited about the future of wearable technology. Some estimates project the sales of wearables could gross almost $6 billion by 2018.

In addition, these devices are evolving in both design and capability, increasing their relevance and use. Early fitness monitors were generally expensive and obtrusive; only athletes, the very fit and/or participants in clinical or research programming used them. Now, with the myriad design options, the integration with other technologies (smartphones, smartwatches, etc.) and the reduced price point, these devices are bound to continue to expand in popularity.

Why are wearables seen as an effective way to promote wellness?

Wearable technology is generally affordable and easy to use. These devices could track the user’s fitness activities, sleeping habits, body temperatures and heart rates to deliver real-time, relevant health information.

By leveraging the data produced from these devices, the potential is there to improve health and reduce health care costs over time by modifying daily health behaviors, while also improving preventive care. Wearable technology could advance population health management and allow an individual’s health care provider to support them in a more proactive and effective way.

Wearable technology is not a silver bullet, nor does it replace the relationship between a patient and physician. However, the data these devices produce can enable health care organizations to develop more effective and personalized approaches to care, which can improve the health of a population and reduce costs.

What issues are raised by wearable technology?

The concerns over these devices and their use in health care and health insurance are typically around privacy and confidentiality. This, as with any protected health information, needs to be kept in accordance with all applicable laws and shouldn’t be shared with an employer or other entity without appropriate consent from the user.

There’s also concern over how the information would be used. This is a natural concern that occurs with the introduction of any new technology that requires an element of personal information disclosure to function most effectively. Many mobile apps, such as banking apps or travel apps, are great examples of how initial concerns over information sharing dissipates as technology becomes more ubiquitous, personalized and relevant to the individual.

Insights Health Care is brought to you by UPMC Health Plan

How employers can save money with best-in-class health plan design

One of the best ways to control your health costs and trends is through your plan design. That’s why a self-funded environment provides an advantage for employers, says Mark Haegele, regional vice president of sales at HealthLink.

“There’s more to plan design flexibility, and you can take ownership over the plan design to change participant behavior,” Haegele says.

Smart Business spoke with Haegele about some best-in-class plan design practices that employers can incorporate into their plan design to help save money.

How does pay for performance work?

This term is broadly used throughout health care, but for plan design it means properly aligned incentives and paying for the performance of members and health care providers.

A provider might be reimbursed, based on how it performs according to metrics. If a primary care provider treats a member, it’s hard to quantify if that member is receiving the appropriate levels of care unless you set up a performance metric and engage on it.

Not only can health care providers and hospitals be reimbursed for performance, it works for members, too. The plan design can reimburse members based on their commitment to seeking and ensuring they meet the minimum levels of care for an illness or their overall health. Is their blood pressure, cholesterol and body mass index in range? If they are in check, your employees and their dependents might get dollar credits toward their premium.

You can also measure upwards of 30 chronic conditions for the minimal levels of care associated with those conditions. If a member meets that treatment protocol, you can either 1) pay for those minimum levels of care or 2) ensure that member gets credit toward his or her premium.

What are benefit carve outs?

In a self-funded plan, you can provide preferred pricing and providers for certain services that are carved out of your normal benefits. This includes things like dialysis, cancer, certain elective surgeries, laboratory or high-cost imaging.

Very specific language can be incorporated to help manage these cost items. Not only are you putting a limit on it, you’re also directing members to certain facilities.

How do member self audits help cut costs?

It has statistically been proven that when members get care, health care providers will make mistakes and bill for services that members didn’t receive. There have even been extreme examples where somebody has his or her broken arm set and gets billed for a hip replacement. Because there’s no mechanism to scrutinize these billings, mistakes often don’t get caught.

You can set specific plan language, so that if members ask for a list bill from their hospital stay (whether it’s in or outpatient), identify services that they didn’t receive and then get them eliminated from the bill, the employer shares the savings with the member.

What does ‘not to exceed’ language mean?

This is true reference-based pricing, with a list of common health procedures and the maximum that the plan will pay.

For example, a health network might determine knee replacements in your region on average cost $15,000. It also finds five facilities within 20 miles that charge $9,000. So, your self-funded plan might state that it will provide members with knee replacements, not to exceed $10,000.

It steers behavior and forces the member to ask questions and have a dialog with the insurance company, third-party administration or network about the cost.

How can state mandate exclusions be incorporated into plan design?

Under a fully insured environment, insurance companies have to cover everything that the state mandates. For example, bariatric surgery and infertility treatment have to be covered in Illinois.

If you’re self-funded, your plan design language can exclude state mandates. It highlights the fact that you have flexibility and control as a self-funded employer. You could even say: I’ll cover 50 percent, instead of the state mandated 80 or 90 percent.

Plan design features in a self-funded plan allow you to exercise more control over your health care costs, which is something that many employers are looking for.

Insights Health Care is brought to you by HealthLink

How to encourage healthier behavior in your employees

Employees are a company’s greatest assets — but their health issues can dramatically affect the workplace. Employees who aren’t healthy have lower productivity and higher health costs. The cost of health care has a major impact on a company’s bottom line, says Carla M. Flamm, account manager III at HealthLink.

According to the National Center for Chronic Disease Prevention and Health Promotion (CDC):

  • Four of the 10 most expensive health conditions for U.S. employers — high blood pressure, heart attack, diabetes and chest pain — are related to heart disease and stroke.
  • Work-related stress is the leading workplace health problem and a major occupational health risk, ranking above physical inactivity and obesity.
  • Productivity losses linked to employees who miss work cost employers $225.8 billion, or $1,685 per employee, each year.
  • Full-time workers who are overweight or obese and have other chronic health problems miss about 450 million more days of work each year than healthy workers.
  • A 1 percent reduction in excess weight and high blood pressure, glucose and cholesterol levels has been shown to save $83 to $103 annually in medical costs per person.

Smart Business spoke with Flamm about how to talk to your employees about their health.

How does encouraging healthy behaviors specifically benefit employees?

Employers have a responsibility and unique opportunity to promote individual health and foster a healthy work environment.

There are many reasons why people don’t take an active approach to their health. They may not know how or may lack the necessary tools. Providing relevant information and resources encourages employees to take personal responsibility for their health.

How does this benefit the employer?

As a result of your efforts, you can reduce health care costs. Plus, healthier employees equal greater productivity, higher morale and less absenteeism.

As employers of all sizes recognize these benefits, they are offering more wellness programs to their employees. According to the CDC, in 2014, 73 percent of companies with three-199 employees and 98 percent companies with 200 or more employees offered at least one wellness program as part of their health benefits.

When it comes to encouraging healthy behaviors, what are some best practices?

Senior leadership must drive the program. Some of the most common offerings include smoking cessation, discounts on gym memberships and distribution of monthly/quarterly reminders on relevant health related topics (i.e. healthy eating, stress management, self-care).

Many employers think about individual actions like quitting smoking, but you should also consider strategies designed to influence the overall work environment, not just one employee.

Does it matter how you communicate, and how can you ensure this is actually effective?

You’ll want to use the appropriate communication channels that fit your employee audience. Some examples include Intranet, posters, payroll stuffers and lunch-and-learns.

In order to ensure your communication doesn’t come across as lecturing or become one more piece of information that nobody looks at, you should create a wellness committee/team. This team from all levels of management can encourage feedback and help create a supportive work environment.

Why should you measure your effectiveness?

Measuring the effectiveness of your communication is just as important as delivering. Change rarely happens overnight. You’ll want to set realistic objectives and goals, and then determine if those goals were met and develop next steps.

In order to achieve engagement, employees must receive regular and effective communications, which are timely and relevant. It is critical that the employer determines how well the program has been received — listen to your staff and change your program activities if your employees are not engaged.

Insights Health Care is brought to you by HealthLink

How to get the word out about EAPs, which traditionally are under used

Employee Assistance Programs (EAPs) have a long history of success in helping employers and employees tackle complicated and difficult problems. EAPs can trace their beginnings back to 1917, and have been a part of many company benefit programs since the 1960s and 1970s.

And, yet, EAPs remain an under-used resource for many employees. Employers have to be frustrated when something that could help all employees is not put to best use.

“The reasons for the under use of EAPs are many,” says James Kinville, senior director of LifeSolutions, an EAP that is part of the UPMC Insurance Services Division. “What’s most important is overcoming those reasons and getting the word out to employees that EAPs are a valuable resource that they have available to them.”

Smart Business spoke with Kinville about ways employers can make employees more aware of EAPs and take advantage of their services.

Why do employees resist using an EAP?

Oddly, one of the biggest reasons is that many employees do not believe that EAPs are truly confidential. This comes from a lack of understanding of how EAPs operate. It is imperative that an employer continually educates employees about how an EAP works.

And, of course, the biggest thing is that an EAP is absolutely confidential. EAPs do not report back to the employer after meeting with an employee. Time spent with an EAP is not part of an employee’s work record.

Without that kind of understanding, it is difficult for an employee to look to an EAP as a trusted resource.

What are some other reasons for not using an EAP?

Another misconception still prevalent in the workplace is the stigma attached to reaching out for help in this manner. Men, especially, can struggle with this. What needs to be explained is that everyone at some time or other has had on- and off-the-job problems of a similar nature and getting help to deal with these kinds of issues is a smart thing to do.

Consider what EAPs handle: financial problems, marital and family issues, cancer, stress-related illnesses, caregiving for parents, substance abuse, workplace conflicts, depression and more. It makes sense to turn to a professional for help with these subjects and it makes sense to realize that some of these problems are bigger than anyone can handle alone. It’s not a stigma to go for help, but rather a wise choice.

Does an employee need to go through HR or get permission from their boss to use an EAP’s services?

There is no need for an employee to tell anyone — boss, HR official or work colleague — if he or she wants to partake of EAP services. Companies provide an EAP phone number and an employee can call confidentially and make an appointment.

Because EAPs operate independently of an employer, they are often flexible about when and where they can hold sessions. It could be over the phone, at a therapist’s office or even at the worksite.

What else do employers need to know about EAPs?

Sometimes, employers can be guilty of not fully realizing how EAPs can enhance an organization’s performance, its culture and its business success. EAPs provide value in three ways — by leveraging the value of an organization’s workforce, by addressing the cost of doing business and by helping an organization mitigate its business risks.

It is a key component of an employer strategy to increase employee engagement and improve productivity, morale and workplace harmony.

How does an employer choose an EAP?

Employers need to choose an EAP that can optimize its value to a company’s culture and workforce to ensure the achievement of business objectives.

Employers should weigh an EAP’s experience and expertise in the field, the credentials of the EAP’s staff, the EAP’s level of responsiveness and accessibility, its ability to integrate with other key benefit providers and whether it can tailor a plan design to fit a company’s specific needs.

Insights Health Care is brought to you by UPMC Health Plan

Why HSAs have become a valuable tool in retirement planning

Health savings accounts (HSAs) have become a popular way to pay for health care. And thanks to a growing understanding of their tax benefits, they are also starting to be seen as a worthwhile addition to any retirement plan.

According to a report from HSA consulting firm Devenir, more than $24 billion was deposited into HSAs in the United States in 2014 — up $5 billion from the previous year. In the same time, the number of actual accounts rose 22 percent to almost 17 million.

“HSAs are a great way to supplement retirement savings, but the concept is still new for some employees,” says Amber Hulme, Medical Mutual vice president, Central and Southern Ohio. “That’s why it’s important for employees to understand how HSAs works, so they can take full advantage.”

Smart Business spoke with Hulme about how HSAs work, why they are getting so popular and what makes them such a valuable tool for employees trying to plan for retirement.

What are the basics of an HSA?

HSAs can be used with certain types of high-deductible health plans. The IRS has rules for which plans qualify. For 2016, plans need to have a deductible of at least $1,300 for individuals and $2,600 for families.

The IRS also limits how much money can be contributed to an HSA per year — $3,350 for a single person, $6,750 for a family. Employees who are 55 or older can contribute an extra $1,000 each year.

Why are they getting so popular?

The biggest reason is the tax advantages. When employees open an HSA, they can defer money from their paycheck into their account tax-free. That also applies to any contributions their employer makes. The money can then be used to pay for approved medical expenses without paying taxes. Any money left over stays in the account, earning interest tax-free.

Eventually, employees can use the money they have accumulated to invest in stocks, bonds or mutual funds. Any profits, whether from dividends or capital gains, are nontaxable. HSA administrators might have rules about minimum balance before investments are allowed, but it’s usually not more than $2,000.

How do HSAs work in retirement?

HSA funds can always be used, tax-free, to pay for approved medical expenses. When employees turn 65, they aren’t subject to the early withdrawal penalty, which is usually around 20 percent. So they can choose to spend the money on other things, like travel, and only pay the taxes.

If they enroll in Medicare, no more contributions are allowed, but the money in the HSA can be used to pay the premiums — with no penalty and no taxes.
Medicare Supplemental (Medigap) policies have different rules, so that option isn’t available.

What are good ways to encourage employees to use their HSA?

Employer contributions are a great way to drive employee participation and gain acceptance in HSAs. That’s especially true for employees who are transitioning from a more traditional type of health coverage to a high-deductible plan.

Otherwise, employees just need to understand how HSAs work and all of the financial benefits they can offer. That’s why education is so important. The organization’s insurance carrier or HSA administrator can provide a wealth of resources to help make sure employees use their accounts as effectively as possible.

Are any other important trends developing?

Traditionally, HSAs have been accessed separately from a member’s health plan, either through a bank or another type of financial institution. But as consumers take more control of their health care, they want more connectivity and ease of use.

In response, many insurance carriers, including Medical Mutual, are moving toward platforms that let members review their HSAs and claims information in one place. This integration will help consumers be more engaged in their health care costs, and more empowered in their retirement planning.

Insights Health Care is brought to you by Medical Mutual

Simple, visible moves help in achieving a culture of wellness

Small changes, big results — that’s not always how things work, especially when it comes to health and wellness. But, in terms of the workplace, small changes can often do the most to encourage a culture of wellness.

“You can make a big difference in the lives of employees simply by making the work environment more conducive to wellness,” says Dr. Michael Parkinson, senior medical director of UPMC Health Plan and UPMC WorkPartners. “It doesn’t take major, costly changes to have an impact. Small, simple but visible moves can communicate that employers are serious about improving the health, safety and well-being of their most precious asset — their employees.”

Smart Business spoke with Parkinson about small changes that can impact wellness.

What are some ways employers can impact employee wellness at the workplace?

One place to start is to encourage employees to walk away from their desks. Cubicles are a mainstay of many workplaces, and employees spend much of their time in front of computers. If ‘sitting is the new smoking’ — yes, sedentary lifestyle is a major contributor to death and disease in the U.S. — then getting employees up and moving more needs to be built into each workday.

Leading companies schedule ‘recesses’ throughout the workday, emphasizing stretching, walking meetings and brief walks. Opening an attractive break room or workplace cafeteria encourages employees to not eat at their desks and move at lunchtime.

In early studies, standing workstations have been shown to decrease musculoskeletal strain, improve concentration and increase energy expenditure. Consider introducing one swing activity workstation per group of employees, if the expense for a total office reconfiguration is unaffordable.

Can employers actually increase their employees’ physical activity?

The Centers for Disease Control and Prevention (CDC) has determined that people who get adequate amounts of physical activity have reduced rates of chronic disease, are better able to maintain a healthy weight, can better manage stress and perform better at work.

Employers can help increase physical activity by taking small measures, which make more activity the expectation and default option. For instance, unlocking the stairwells, making them attractive and encouraging all executives and managers to ‘take a hike’ multiple times throughout the day creates an activity culture.

Employers can support employees who bike to work with safe and secure places on-site for bike storage. They can promote active means of transportation, such as mass transit, by providing transit passes. They can encourage running, walking, biking or taking a fitness class during the day with flextime schedules. Even a single wastebasket in a central work area encourages employees to walk in order to dispose of trash.

How can employers promote healthy eating?

Workplace cafeterias are an ideal place to preferentially price and promote fruits, vegetables, whole grains, non-processed foods and sugar-free drinks. Vending machines can offer healthy alternatives to snack food. Sponsoring ‘new fruit and vegetable of the month’ giveaways can expose employees to foods rarely eaten but loaded with vitamins, disease-fighting antioxidants and micronutrients.

What about stress, mindfulness and well-being?

All employers see direct and indirect costs of anxiety, stress, depression and lack of mental focus in their medical, disability, worker’s compensation and total productivity costs.

Can the office space or workflow be made less stressful? Are there unnecessary noises, interruptions or poor lighting that exacerbates an already challenging work environment? Are there quiet spaces or rooms for taking a break or practicing mindfulness (deep breathing with mental visualization) to relieve stress and re-charge?

Can employers work to decrease tobacco consumption?

The CDC estimates that smokers cost employers about $5,800 more than their nonsmoking co-workers. A smoke-free policy for the workplace and worksite property should be considered. Employers can make tobacco-cessation classes and services available, as well as materials that promote the benefits of living smoke-free.

Insights Health Care is brought to you by UPMC Health Plan