In pushing for healthier employees, Florida Power & Light’s parent company is charging well ahead of the pack, offering up to $1,640 a year to some employees for good behavior while punishing others by threatening to take away up to $30 out of each biweekly paycheck.
As South Florida employers prepare to stage open enrollments for 2013 health insurance, the offering of carrots for healthy actions keeps ramping up, but Next Era Energy, owner of Florida Power & Light, is leading the way among the region’s large employers with threatening with a stick as well.
Some companies are making only minor tweaks, but at least one large employer is struggling to deal with skyrocketing catastrophic claims. Meanwhile, some experts say the truly major changes are a year away, in 2014 — a time when many employees might find themselves in a virtual shopping mall, choosing health insurance with company provided credits.
As always, costs keep rising. The Aon Hewitt consulting company projects healthcare costs for large employers in South Florida will increase 6.4 percent in 2013, to $9,788. Workers should expect a 9 percent increase — spending about $5,000 out of their own pockets for their share of premiums, deductibles and co-pays.
Another consulting company, Mercer, reports that most of its large-company clients are passing only minor cost increases to their employees.
“It’s been a great year for employees,” said Matthew Snook of Mercer’s Tampa office. Most Mercer clients are making “very, very calm rates of increase” to employees, generally 3 percent to 5 percent. Employers “are being kind of gentle.”
That’s what’s happening at the University of Miami. Spokeswoman Margot Winick reported: “Our health plan costs have risen slightly but the percentage is still far below national and local trend rates.” For 2013, most faculty and staff will see a monthly increase of $1 to $5 in their premium costs, but no changes in deductibles or co-pays.
Bigger changes — and potential awards — are ahead for workers at Next Era Energy and its subsidiaries.
For the past six years, Next Era has been ramping up awards for employees who fill out health assessments on the web, said Melissa Miller, Next Era’s benefits director.
These self-estimates can trigger automatic responses, suggesting programs available for certain risk factors, such as overweight diabetics. That might be followed up by a call from a professional recommending lifestyle changes.
“We have 12 dedicated nurses and coaches to help them improve their health,” Miller said.
While completing the assessments has previously been rewarded with bonuses, FPL this fall sent a letter to union employees stating that, starting Jan. 1, $15 per employee or $30 per couple will be deducted from biweekly paychecks if less than 80 percent of union workers and covered spouses don’t fill out the assessment.
Other incentives are available at Next Era. Nonunion employees and covered spouses who undergo a simple physical exam can get $100 each for meeting benchmarks for blood pressure, cholesterol and weight. That adds up to a potential $600 a year that can be placed in a health reimbursement account, to pay for deductibles and other healthcare needs, Miller said.
The use of weight is particularly interesting. Healthcare experts have long known that obese employees cost companies more, but many consultants have warned against penalizing fat employees because workers could claim their weight is due to a medical condition, such as a thyroid problem, or genetics, opening the possibility of a discrimination lawsuit.
Next Era’s solution is to use weight as a reward, not a punishment.
“We’re not trying for ideals” in the benchmark, says Miller, the benefits director. For weight, employees get a bonus if their body mass index is under 30 — that’s the threshold for obesity — rather than 24.9, the threshold for normal weight, according to the Centers for Disease Control and Prevention.
Baptist Health South Florida is also using a BMI of 30 as part of its rewards for the same three biometric measures. Chief Human Resources Officer Corey Heller says employees can earn up to $250 annually in incentives, including $50 for not smoking and another $50 for getting a flu shot.
Baptist believes “motivating and incentivizing is the best way to a healthy workforce,” Heller said. “We don’t believe punitive action is necessary.”
Such rewards are spreading across the country. UnitedHealthcare spokeswoman Elizabeth Calzadilla-Fiallo says more than 1.6 million employees have enrolled nationwide in its wellness programs that can lower their premiums by up to $1,000.
Ryder, the Doral-based international logistics company, plans also to offer more incentives in 2013, introducing employees to UnitedHealthcare’s Wellness Portal , where they can earn rewards “by taking healthy actions and engaging with health coaches,” said Pamela Rothstein, Ryder’s benefits director.
Rothstein said Ryder is facing particular challenges because, after five years of lower than average cost increases, it was hit in 2012 by huge increases in claims of more than $100,000. Through the first eight months, such catastrophic claims consumed 27 percent of Ryder’s total healthcare costs, Rothstein said.
Rothstein said Ryder is watching carefully a new concept developed by Aon Hewitt, which has set up a private health exchange, a mirror of what the federal reforms are planning for 2014. While the federal exchange is intended mostly for small businesses and individuals, Aon’s focuses on the large employers that are its clients.
Aon’s Ken Sperling said an employer first decides how much it wants to give each employee for healthcare. That amount becomes a credit that the worker can use to shop on the exchange, where up to nine insurers compete for business by offering four Aon-designed plans.
Workers who choose a plan with fewer benefits may not have to pay anything additional, Sperling said. Those who want more benefits, or lower deductibles, may have to pay more for premiums out of their own pocket.
Aon Hewitt rolled out the exchanges this year, using its own 20,000 employees.
For 2013, Sears Holding and Darden Restaurants, which have more than 100,000 employees are using the Aon exchange.
Calzadilla-Fiallo said UnitedHealthcare is participating in the Aon exchange “to gain valuable insight into consumer behavior,” both for the private exchanges that could grow quickly and for the government-mandated exchanges that will be used by millions in 2014.
Ryder is one of many companies that’s in a “wait-and-see mode,” Rothstein said. “The concept is very new.”
She likens it to a 401(k) in which an employee is given money to manage on his or her own, rather than an employer-defined pension.