Employers Spending Big on Health Benefits to Ensure Worker Productivity (4/26)

Employers Spending Big on Health Benefits to Ensure Worker Productivity

Companies are spending big bucks to keep their employees happy, healthy and productive. According to second-year findings in a landmark study on worker health and productivity, average annual expenditures exceed $8,000 per employee for healthcare and related costs. The authors of the study say these results will likely spur more businesses to demand that their insurers and managed-care plans step up efforts to keep workers healthy -- and get them back on the job sooner when they do fall ill.

The MEDSTAT Group and American Productivity & Quality Center (APQC) co-conducted the study that details median costs for companies to ensure the health and subsequent productivity of their employees. Of the approximately $8,000 per employee, $5,000 was related to healthcare. Turnover, unscheduled absences, non-occupational disability and workers' compensation accounted for the remaining $3,000. The study suggests employers can reduce these costs by up to $1,500 per employee through comprehensive Health and Productivity Management (HPM) programs.

"Healthcare premiums are again increasing, and health plans aren't as willing to negotiate reductions," says Ron Z. Goetzel, vice president of Consulting Services at The MEDSTAT Group, a health information and research-consulting firm headquartered in Michigan. "Many employers are asking their health plans to do more than manage utilization and cost. They're asking them to improve productivity by providing more preventive services and appropriate medical care, so that workers can remain healthy and at work, or if they become ill, they get back to work sooner and healthier." Goetzel suggests some employers are even willing to pay more for plans that address productivity.

Brian Boffa, vice president of sales for Personnel Coordinators, Inc., an employee-leasing agency based in New Jersey, feels strongly about the correlation between worker health and productivity. "Offering employees health insurance can make the workforce more productive because they are getting something that they didn't have before, and that's assurance with insurance, and knowing that if they do get sick, they are going to be covered," says Boffa. "Employees with health benefits are more inclined to push themselves harder or work that extra hour."

As employers continue searching for benefits that will increase worker efficiency, new research by the Eastbridge Consulting Group indicates high consumer satisfaction with voluntary benefits being offered by their companies. The Eastbridge MarketVision study finds the most commonly offered voluntary benefits are life insurance, disability and dental insurance. High interest levels were also expressed in benefits such as dental, vision and prescription-drug plans and mutual funds.

Despite reported satisfaction and interest levels in benefits plans, however, the survey points out that the industry's lack of control over key processes creates dissatisfaction. According to Eastbridge, more than 60 percent of employees are asked to fill out and submit their own applications, and a mere 11 percent meet one-on-one with a sales representative to better determine their needs.

"Insurance companies must devote more effort to educating and informing employees, both before, during and after enrollment," says Eastbridge president Gilbert W. Lowerre. Observers agree a healthy worker is a happy worker, and they suggest that companies that offer HR assistance to ensure their employees are able to obtain the benefits they are entitled to will be rewarded by lower turnover and higher productivity.