Health risk assessments a major benefits trend for 2007

Consultants say use of HRAs could jump 21% in 2007

If the employer you work with is not already using health risk assessments (HRAs) to flag potential health risks in employees, get ready — the number of U.S. employers offering HRAs is projected to jump 21% in 2007. So if you are involved with wellness and prevention programs in your workplace, get ready for an influx of participants.

As employers continue to look for ways to control rising health care costs, an increasing number are offering employees incentives to complete a health risk assessment, according to international consultant Watson Wyatt Worldwide. Watson Wyatt's National Business Group on Health recently reported findings of a 2006 survey on employer-sponsored benefits, which reveals that two thirds of employers in the United States are already offering employees HRAs.

"Employers are trying to address the root causes driving the costs of health benefits, and employee health is a big part of that," says Watson Wyatt senior consultant Bruce Kelley.

Employers considering HRAs notice early on that using the assessments in helping employees avoid serious health compromises later on requires spending money now on administering the HRAs and paying for the incentives necessary to get the best level of participation possible.

"To get good participating levels, employees offer incentives, that initially are something like a gift certificate to every employee who completes the health risk assessment [questionnaire]," says Kelley. "As time goes on they need to offer a more substantial incentive, and often it is in the form of creating a difference in what employees contribute to their health plan. If they complete the assessment, their contribution into their health plan is reduced."

Now is the time HRAs introduced

Late in the year is generally when employees are offered open enrollment —- when they are invited to enroll in or change their health benefits, and new features like HRAs are introduced.

"As employees pick up more responsibility for funding health care and other benefits, open enrollment is the perfect time for workers to evaluate their benefits and ensure that they select the coverage that is right for them and their families," according to Tom Billet, a senior consultant with Watson Wyatt. As for what workers can expect in the coming year, Watson Wyatt's survey and research higher premiums, deductibles, and co-payments for medical and prescription drug benefits are on the horizon.

Curbing those costs for themselves and their employees is behind the push to include HRAs, Kelley says.

"There's always been a core group offering health risk assessments, but in the last few years, with the focus on costs and old-line managed care just not working [to curb expenses], employers have turned to new approaches, and the health risk assessment is one of those," he explains.

As for the costs incurred by employers who introduce HRAs into their benefits offerings, Kelley says the payoff can be huge.

"Employers who offer health risk assessments and then follow up with prevention programs can save two to three times what it costs them [to pay for the HRAs]," he says. "After all, the costs they're avoiding [for serious or chronic health problems that progress unchecked] are pretty big."

How the HRA is delivered determines much of the cost. A web-based questionnaire is quite inexpensive, while a paper-based assessment that is accompanied by labwork is more expensive — but still cost-effective, Kelley says.

For more information projected trends in employee health benefits, visit www.watsonwyatt.com.