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What is Business Roundtable

Business Roundtable (BRT) is an association of chief executive officers of leading U.S. companies working to promote sound public policy and a thriving U.S. economy.

Statement on Health and Human Services, Labor and Treasury Departments’ Working Meeting

Incentive-Based Worksite Wellness Programs

Statement by Business Roundtable

Maria Ghazal, Director of Public Policy and Counsel

Health and Human Services, Labor and Treasury Departments’ Working Meeting

Business Roundtable (BRT) is an association of chief executive officers of leading U.S. companies whose companies provide health coverage to over 35 million employees, retirees and their families.  If asked what their companies’ greatest asset is, CEOs almost always will answer:  “Our employees.”  As business leaders, CEOs understand the importance of having a qualified, productive and engaged workforce — so it is no surprise that U.S. businesses are committed to offering benefits and services that help their employees lead healthier lives and make wise use of health care services.

Business Roundtable member companies have taken the lead in developing innovative benefits and programs that promote wellness, prevent disease and manage chronic conditions.  Increasingly, they are focusing on how to integrate wellness strategies with other corporate health and safety initiatives.  They are innovating in their health plan design, and creating a corporate culture of good health -- often openly promoted and championed by CEOs and other top business leaders within the organization.  This is much like the First Lady’s commitment to reducing obesity, especially among children.  The leadership of the First Lady and of many companies is to improve the health care of our employees and others around us. 

We know this topic we are discussing today is a difficult one.  However, I am pleased to support efforts, by employers, to help workers become more engaged in their health care.  We must find ways to educate, engage and promote greater understanding of the role individuals can play in improving their own health care. 

The most effective way to control health care costs is to try to prevent or reduce the need for health care in the first place.  Over the long term, one of the largest potential savings in health care may come from behavioral change, in which individuals become personally engaged by taking actions to avoid preventable conditions and detect other conditions as early as possible.  Recently, BRT released our annual Health System Value Comparability Study, in which we examine how our health system affects the competitiveness of American companies by comparing it to those of our economic competitors.  While we havemade dramatic improvements in some critical areas, such as hospital safety, the area where we are falling behind is the number of Americans who are obese.1

Lifestyle-related illnesses affect the costs of health care and benefits for each and every employee.  Employers are developing innovative workplace programs to help their employees improve their health, their productivity, and identify new methods to encourage the use of wellness and prevention programs.  Today, you will hear from many employers who are adopting innovative prevention and wellness programs for their employees’ benefit.  We urge the Agencies, in drafting proposed regulations, to permit innovation in these programs as advances in thinking and evidence suggest more effective ways of engaging employees to accomplish the goal of improved health. 

Among other components in a successful wellness program, incentives and disincentives help motivate employees.  For example, education, another important component of a wellness program, may be insufficient by itself as a motivator.  Incentives and disincentives, along with ongoing and focused communications, can help motivate employees.  For example, employers often provide significant financial incentives for employees to complete health risk assessments - these are tools that can inform an employee on some of their health risks that they may be able to improve.  Health risk assessments have been in use by the private sector for many years.  Private and secure health risk assessments collect information about an individual’s biometric statistics, behaviors, and self-reported health status. This information can trigger appropriate follow-up and clinical coaching based on risk factors, the precursor to disease.

Employers also use incentives, e.g., providing rewards, to encourage individuals to improve lifestyle risks, such as eliminating tobacco use and increasing physical activity. A reward can be in the form of a discount or rebate of a premium or contribution, a waiver of all or part of a cost-sharing mechanism, the absence of a surcharge, or the value of a benefit that would otherwise not be provided under the plan.

Some wellness program rewards are based on participation in a program, while others, consistent with HIPAA’s nondiscrimination rules, may be “results” based. If an employer implements a “results-based” program, the program must meet the current HIPAA regulatory requirements.  One example of this type of “results-based” program is if the plan participant must attain a cholesterol level below 200, or attain a certain body-mass index, or quit smoking.  Under the current regulations, employers must provide employees with an alternative way to achieve the incentive. Today, this incentive is limited to 20%; and the Affordable Care Act (ACA) permits health plans to raise to 30% the permissible discount for results-based programs.  We believe this can provide a powerful incentive for healthy behaviors. The goals of promoting workplace wellness and prevention are strengthened by the new provisions in the ACA.

Today’s working meeting is an important first step. BRT thanks the Agencies for conducting it and for permitting us to participate.

1 BRT Annual Health System Value Comparability Study, November 2010.  The study found the U.S. continues to lag on key components of health system value, such as rising obesity levels and per capita health care spending. In fact, this year’s study reveals that almost 76 percent of Americans are overweight or obese, and that the problem is growing.