Wellness Programs Run Amok?

The Wall Street Journal reports on the pros and cons of “treadmill desk” workstations. Check it out here.

3 Signs Your Wellness Strategy Will Fail

Everyone wants an effective wellness strategy to maintain a healthy, happy and low-cost population, but how do you know yours will work? Linda K. Riddell, a principal at Health Economy LLC and frequent guest contributor to EBN’s blog, Employee Benefit Views, has compiled some warning signs you may be on the wrong path.

Doomed to collapse?

The best way to choose a wellness and health cost strategy is to study your group – its illnesses, social factors, work environment, and other relevant traits. Then, select a program that responds directly to those issues. As you consider your strategies for 2013, the following are three wellness red flags to watch out for.

1. Everyone’s doing it

Programs that have good spin become popular whether they deliver results or not. Take, for example, disease management. No self-respecting employer would have a health plan without disease management, though only certain types of people benefit from it. People who have only a high school education get much more from disease management than college-educated people.
Similarly, wellness incentives, weight loss programs, and many other wellness tactics are considered must-haves but do not have proven positive results. Before you jump to add or continue an everyone’s-doing-it program, look for solid evidence of results.

2. Everyone ‘knows’ it works

The things that everyone “knows” are things that the media has repeated, not necessarily truth. Detecting disease early, even before it causes a problem, is widely touted as the goal of wellness programs. Supposedly, it is cheaper and better to treat early. But we are now starting to admit openly that screening programs, such as mammograms, can cause more harm than good. Patients get treatment they don’t need, racking up costs for no benefit or even harm.

3. The salesperson has data showing that it works

Just because another employer had success does not mean you will. Their workforce, social-economic status, work environment, company policies, management, climate, social support and myriad other factors will be different from yours.

In addition, data from the salesperson probably has not been written by a trained statistician. If they are promoting a return-on-investment of $4 dollars for every dollar spent, you are wise to be skeptical. Even two dollars should raise an eyebrow.

Originally posted by Employee Benefits News on 1/9/2013.

Concierge Medicine: Greater Access for a Fee from PBS

Click the below link for a YouTube video from PBS on Concierge Medicine.  Do you agree with offering high-end insurance to high-wage earners?

Concierge Medicine: Greater Access for a Fee from PBS

Consumers' Perceptions of Medical Prices

Consumers’ Perceptions of Medical Prices May Lead Them to Draw Wrong Conclusions

A price tag provides useful information about goods and services, but a recent study showed that prices are not always what they seem in regards to medical care. In a study by the Journal of Consumer Research released in January 2013, researchers suggested that how consumers view medical expenses could lead them to the wrong conclusions.

For example, the study’s authors noted that the low cost of a flu shot made it readily available for many consumers, who considered it essential to stay healthy. However, higher prices for various healthcare treatments signaled reduced accessibility for some consumers and made the medical care less important to them.

Study co-author Janet Schwartz said that focusing on price and risk can prevent consumers from making educated decisions. In fact, she stated that consumers who decide there is less risk in foregoing higher-priced medical treatments could make bad choices that may negatively impact their long-term health.

“Price and risk should be very independent from one another, when you think about consumers making informed healthcare choices,” Schwartz told Kaiser Health News. “But now we see that they are very dependent on one another, in the same way that price and quality are very dependent on one another, and that can lead to some inconsistencies in healthcare purchases.”

Additionally, the study made it clear that healthcare policymakers must provide sufficient information to educate consumers about medical expenses. The study’s authors said that simply offering the price of healthcare products and services is inadequate, and enhanced consumer education should inform people about the risks involved in foregoing important medical treatments.

Consumer-Directed Healthcare Plans Allow People to Make Informed Choices

With consumer-directed healthcare plans (CDHPs), enrollees can make decisions about medical goods, products and services based on data and research. These options give consumers resources they can use to control their spending, and research showed that CDHP participants tend to make cost-conscious decisions.

The Employee Benefits Research Institute’s December 2012 Consumer Engagement in Health Care Survey showed that adults enrolled in CDHPs are more likely to display cost-conscious behaviors than those who participate in traditional healthcare plans. Researchers also found that CDHP enrollees were more likely to try to find information about their doctors’ costs and quality from sources other than the healthcare plan.

Originally Posted by CYC Staff on 1/15/13 in Connect Your Care

PPACA 2013 observations

We saw this timely article on EBN’s webpage and want to pass it on and comment.

While State exchanges are something that are part of our PPACA reality, the administration of these plans is an issue. How will they be enrolled and who handles the eligibility?

PPACA opposition – is 52% enough to overturn the law? It’s not likely, but this statistic continues to point to the fact that 78% of the Republicans in Congress still oppose Obamacare and 52% of survey’s respondents believe that the law should be overturned. This statistic, ironically, mirrors the election’s popular vote.

Women’s Health Care- PPACA’s birth control mandate may well be on the road to interpretation by our highest court but birth control is and always will be a personal choice. Despite how the law comes down, it will unlikely change the habits and desires of women in this matter. Therefore, the costs to the health care system won’t be reduced. They will likely increase due to uncollected expenses generated by these items.

Here is the article;

With the 113th Congress up and running and the president’s policy schedule filling up by the day, a recent poll by the Kaiser Family Foundation and Harvard School of Public Health identified five things Americans would like the government to set as top health care priorities this year:

1. State exchanges. Fifty-five percent of respondents say state-based health insurance exchanges are a top priority for their lawmakers. With only 18 states and Washington, D.C., declaring they will create state exchanges, more information is needed on how federally run exchanges will operate in the remaining states. “This is the year of the health insurance exchange,” said David Colby of the Robert Wood Johnson Foundation at a luncheon held Thursday at the Kaiser Family Foundation. The panelists, including Drew Altman, CEO of KFF, noted that governors are still split along partisan lines about the creation of exchanges.

2. PPACA opposition. Fifty-two percent, including 78% of Republicans, say the Patient Protection and Affordable Care Act opponents in Congress should continue trying to overturn the law. When asked why, a majority of respondents cited overturning the law for “less impact on taxpayers, employers and health care providers.”

3. PPACA complacency. Forty percent think that PPACA opponents in Congress should “accept that it is now the law of the land,” and move on to focus on implementation.

4. Premiums. Increasing state regulation of health insurance premiums should be a priority for lawmakers, 37% of respondents say.

5. Women’s health care. One-fifth of respondents believe lawmakers should limit women’s family planning, reproductive health and other services. A timely topic as PPACA’s birth control mandate seems poised to head to the Supreme Court later this year, according to the Associated Press.


DEV Audit Progression – through Bene-Fit


A Dependent Eligibility Audit is a good first step, but it’s only one step.

In 2004, WestLake Financial Group, Inc. conducted its first DEV (dependent eligibility verification) audit. Once again, ahead of the curve, we faced opposition from both the employer and the employee. Questions were asked; why should we conduct a dependent eligibility audit? What results can we expect? How will our associates react?

The consistent results amazed and alarmed us. There were a large percentage of ineligible dependents in every group. We exposed this phenomenon and removed the truly ineligibles. We coined these ineligible dependents “low handing fruit” because they were, well – ineligible and easy to find. Once removed, the savings was virtually immediate. Recalling that illegal dependents are not eligible for COBRA benefits post audit, there is no trailing claims liability.

Clients were pleased.

Yet we maintain that the removal of ineligible dependents is only the first step in an overall audit savings strategy.  We take the process a few critical steps further.

Once the ineligible dependents are removed (and spouses, if a spousal alternative coverage incentive is offered) there is, by definition, a smaller overall group census. In some cases we see reductions as great as 5 to 10% of the gross population. With this new information in hand we rationalized that there were specific losses attributed to these ineligible dependents and newly waived spouses. In the case of the ineligible dependents their losses will never reoccur.  Their medical conditions should no longer be a factor in predicting the future health of the group. Spouses who are no longer covered (while they could be a future claim if they rejoin the plan) are nonrecurring losses also. We are able to purge ongoing diagnosis from the future loss, renewal and medical trend scenarios.

We are then able, through data analysis, to know exactly the losses attributable to the newly non covered. We are also able to market a smaller and healthier population to the competitive carriers. Of course, the incumbent usually capitulates in this exercise after the competition has spoken.

We argue that the medical insurance renewal is future facing and should be actuarially reconsidered and re-underwritten. Many medical carriers (and reinsurance carriers) use midpoint underwriting assuming present risks to be future liabilities. To validate and cement our position we take this new loss information and smaller census to market.

The results are surprising, even in larger self-funded groups.

This multi-pronged approach, which we call Bene-Fit,  commencing with the DEV audit itself, provides a far greater ROI than simply conducting a one-time audit. Further, it changes the outlook of future renewal negotiations.

Please call WestLake Financial Group, Inc. for more information on this important program.






Discrimination in health plans – is it ever acceptable?

Generally, health plans may not discriminate against members based on their health status or benefit utilization.  HIPAA provides an important exception to this non-discrimination principle that is the basis of the wellness programs we see today.

A plan may provide favorable terms to members meeting specific health related goals only if it meets 5 specific requirements set out in the HIPAA regulations.  These requirements have recently been modified in response to certain provisions of the Health Care Reform (PPACA) bill.

Beginning January 2014, the maximum allowed value of a wellness reward has been increased from 20% to 30% of the plan cost.  The plan cost includes both the employee paid and the employer paid premiums so this amount could be significant.  Additionally, to the extent that the wellness reward concerns cessation of smoking or tobacco use, the maximum permitted reward may be as much as 50% of the cost of the plan.

When implementing “tobacco surcharges” for employee contributions to a health plan, the 5 HIPAA standards must be followed.

The revised wellness program regulations are found here: http://webapps.dol.gov/FederalRegister/PdfDisplay.aspx?DocId=26492

PPACA update 1-24-2013

On Thursday 1/24/2013, the Department of Labor, in conjunction with the Department of Health and Human Services and the IRS, issued FAQ XI in regards to the Patient Protection and Affordable Care Act (PPACA).   Most notably, the FAQ allows for a delay in the requirement that employers notify employees of the existence of the health insurance exchanges.  This requirement would have applied as of 3/1/2013, but is now delayed upon issuance of further guidance.  You can read the FAQ’s here:  http://www.dol.gov/ebsa/faqs/faq-aca11.html


Keep smoking – give up ten years


The USA Today is reporting that smoking reduces life expectancy by over 10 years.  It seems like common knowledge, but the stark reality is that smoking kills and increases costs for employer health plans.   Employer health plans can play a valuable role in helping employee’s quit smoking  by implementing tobacco surcharges and wellness programs. Please see the link below.

Recently I heard a comedian deliver the line – I like McDonalds. Every time I go there I’m admitting that I won’t see my 70s. Funny, but perhaps – true.






Sobering Facts about Obesity – Why Wellness Integration is Necessary

When I focus on the facts about the lack of wellness in our workforce, it keeps me up at night. I worry for our associates. I worry for our children.

Concentrate on these facts about Obesity and you’ll agree.

  • Between 1980 and 2000, obesity rates doubled among adults. About 60 million adults, or 30% of the adult population, are now obese.
  • Similarly since 1980, overweight rates have doubled among children and tripled among adolescents – increasing the number of years they are exposed to the health risks of obesity.


This is only one aspect of the overall problem, of course. Yet it’s a powerful reminder that we are heading in the wrong direction.


Consider the fact that Westlake Financial Group, Inc.  has been on the front line of communication since 1999, when we introduced BenefitsTalk our on-line enrollment program. We found ourselves in the catbird seat. We’ve spent the last 12 years teaching associates how to use the internet to enroll in their benefit programs. Now they are teaching us that they would prefer to use the web for virtually all of their other needs. Therefore we need to provide the associates with wellness electives through and during enrollment.
During the new hire process and again during the open enrollment period, we need to provide the tools to the associate to become well. Over the last twelve years we’ve learned that a voluntary program simply doesn’t work. Therefore we must mandate that the associates comply. We can manage that process through financial incentives. PPACA for 2014 makes that initiative even more visible and viable.


Westlake Financial Group, Inc. has pioneered the use of data integrated into the online enrollment itself, to forecast the expected health issues arising. Through a combination of data integration and health risk assessments, including family health history we can create a probable scenario.
However, if we were successful in reaching all of our associates we would still miss our goal, until… we reach the dependents. Our BenefitsTalk program now asks questions of the spouse and the dependent children to age 26. If we don’ t manage the dependent expenses, we’ll never control the costs.
So let’s get started.