Health Insurance Rewards Healthy Customers

It's a typical day at the office. You skip the elevator and head for the stairs. Lunch is a whole wheat, turkey and veggie pita ‑- hold the mayo. After work, you'll dash to yoga class. Beside you, an overweight coworker gulps down a late breakfast of coffee and donuts. By the end of the day, she'll have puffed her sixth cigarette.

You and your sedentary, smoking colleague observe very different regimens, yet each of you contributes the same amount toward the company health insurance plan. Shouldn't you get some discount or reward for doing the right things?

Yes, say a growing number of insurers and employers who've begun to offer financial incentives and other perks to get workers eating right, moving, staying fit and leading healthier lifestyles.

Chicago Consulting Actuaries (CCA), a firm that helps insurance companies set premium costs, hosted a Colorado health retreat for its own employees and their families last August that jump-started healthier habits. Soda consumption dropped 40 percent and wait times for elevators shrank as more workers began hoofing it up the stairs. CCA also began offering health risk assessments. Employees who attain certain thresholds or show improvements in their health scores can get a 53 percent discount on their premium contribution.

By changing the incentives, the firm's number crunchers figured, "We could change the upward trend in the premium cost," explained Lisa Pingel, CCA's human resources manager.

Studies show a relationship between medical costs and risk factors such as obesity and smoking. For example, median medical costs for General Motors employees, retirees and adult dependents swelled with progressively higher categories of overweight and obesity, according to a 2003 University of Michigan study.

But do company wellness programs actually pay off? "Companies are starting to see, after they've gotten involved in wellness, that they can't track how profitable it's been; they can't track it to the bottom line," noted Derek Sirmans, director of business development at FitInsurance Protocol Management Company.

FitInsurance has begun marketing a program that allows employers and insurers to monitor individuals' compliance with a fitness program. Participants wear a device that measures caloric burn, and the results are recorded via a wireless transmitter. Those who meet specified fitness goals can qualify for perks their employer or insurer chooses to offer.

"Obviously, we feel that a monetary incentive is the most motivating, but some companies want to offer plane tickets," Sirmans said.

If you think you should be reaping rewards for healthy living, shop around. Several major health insurers have health incentive programs. Here are few examples:

PacifiCare Health Systems awards points to members and employees that engage in healthful behaviors or activities. Credits are good for discounts on health-related products and services. Participants may also qualify to enter quarterly drawings for prizes such are treadmills, mountain bikes and iPods.
Anthem Inc. members can earn 10 points a day for logging at least 30 minutes of physical activity. At the 250-point level, a participant may redeem points or keep saving up for better rewards, including sports equipment, electronics and camping and travel gear.
Beginning this July, employees of the giant health insurer Humana Inc. who have been non-smokers since January 1, 2005, will receive a $5 decrease in the premium amount deducted bi-monthly from their paychecks.

Will rewards for wellness curb medical spending? CCA marketing director Daniel Cox said the investment can't hurt. "I think at the end of the day we would rather spend money on fitness classes than on premiums."