Wellness a Winner With Insurance Carriers


Is a wellness program a part of your employer-sponsored benefits?

Despite debate over effectiveness, wellness programs are on the benefits menu for over half of employers (51 percent) with 50 or more workers.

Insurance carriers have been known to make premium rate concessions for employers with active wellness programs.

With today’s premiums, every dollar counts.

Now if we can get that extended to the individual market (where individuals buy their own insurance).

Wellness Counts

Health insurers like wellness programs. Most offer their own programs. Many financially support employers sponsoring wellness programs.

Some offer wellness programs that earn credit toward deductibles or premiums for certain healthy activities or outcomes, such as:

  • Participation in a smoking cessation or disease management program
  • The completion of health risk assessment surveys
  • Obtaining health screenings like body mass index (BMI), blood pressure or cholesterol

Stop-loss carriers are also hopping on the wellness train.

A Business Insurance article, Stop Loss Health Insurers Warming up to Wellness, reported effective wellness and disease management programs are making a difference in stop-loss premiums.

That’s good news for employers exploring self-funding strategy.

Since the implementation of health reform’s Affordable Care Act (ACA), there has been an increasing trend among employers to move to self-insured health benefits.

Self-insured employer coverage avoids certain ACA restrictions and offers greater control over plan design and an exemption from premium taxes.

Employers that are self-insured use their own funds to pay employee health claims. Stop-loss insurance protects employers from large claims loss.

  • Employers purchase stop-loss insurance
  • Stop-loss carriers set a dollar amount (known as an attachment point) when stop-loss coverage begins

Individual stop-loss insurance (called specific stop-loss) is a dollar figure per individual. For example, a specific stop-loss of $100,000 means the maximum the employer pays on an individual for the plan year is $100,000. If claims exceed that, the stop-loss insurance kicks in.

Aggregate stop-loss insurance protects for loss over a certain percentage of the total expected claims. The underwriting gods estimate how much will be paid out in claims for the group. A typical aggregate amount is 125%. So if more than 125% of the underwriters’ estimate occurs, the stop-loss insurance pays the excess amount.

The Business Insurance article explained how stop-loss premiums could be affected.

  • Premium discounts − Carriers may offer premium discounts for wellness programs
  • Lower aggregate attachment points − One carrier offers a lower amount (for example 120% instead of 125%) for participation in a specific program

Most concessions are on a case-by-case basis.

Wellness and the Individual Market

There are rules meant to protect employees from discrimination as it relates to wellness.

Employers must consider employees with health conditions when creating reward incentives.  For example, if the wellness program offers a reward for participation in a walking program, an alternative must be offered to employees unable to walk due to health issues.

As long as wellness programs in the individual market are available to everyone (and comply with state law), there is no discrimination.

Wellness programs for the individual market are typically participatory. That means any rewards are based on simply signing up. Not on achieving a specific health goal − like walking 10,000 steps per day or total cholesterol levels under 200 mg/dL.

As a biased, healthy individual who purchases her own insurance, I find that too bad. I would welcome the opportunity to lower premiums based on specific health targets.

Lower premiums and healthy, too? Sounds good to me.


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Notice of Disclaimer –Cathy Miller is not an attorney or health care provider and cannot provide legal or health care advice. The information provided is for your general background only, and is not intended to constitute legal or health care advice as to your specific circumstances. We recommend you review legislation with legal counsel and visit your physician for health care issues.

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