What increases employee health insurance costs, and why you should know this

Every year health insurance costs seem to rise at a huge rate. Companies of every size are trying to figure out how to keep their insurance costs low so that they can continue to offer the same quality health coverage to their employees. Sometimes it can be difficult to pin point what exactly is causing a company's health insurance costs to rise so rapidly. While part of it has to do with inflation and the cost of health care, the other part has to do with the health of the employees at a given company. Here are a few hints of what increases employee health insurance costs, and why employers should know this.

Smoking

Smoking is one huge reason why insurance companies raise the health insurance rates for a company. Because smokers spend more time at the doctor, are a higher risk for cancer, and tend to bring illnesses into the office, the health insurance company must charge more.

This is important to know because there are steps that can be taken to help remedy this problem. Many companies have begun making their office smoke free. In some extreme cases, companies have required their employees to quit smoking with the consequence of being fired if they don't or are unwilling. These companies offer smoking cessation classes to their employees. Some companies give employees trying to quit free nicotine patches or gum. However it is accomplished, helping employees to quit smoking will lower the health insurance costs for a company.

Obesity

Overweight employees also contribute to high health insurance costs. Obese workers are at a high risk for getting diabetes or chronic arthritis. These risks are too big for insurance companies to overlook. So, companies must charge higher rates to make up for the risk that obese employees bring.

Overall Health

Another contributor to high health insurance costs can be attributed to the number of times employees saw the doctor the year before or if they were treated for any serious illnesses. Employees that are constantly sick or that visit the doctor too often will also contribute to higher health insurance costs. These frequent visits to the doctor could be attributed to high stress, not enough sleep, poor eating habits, or poor physical health.

Many companies have looked for preventative measures to show insurance companies that they are invested in employee health. One measure companies are taking is to implement a wellness program. Wellness programs vary in complexity but have the common goal of encouraging healthy lifestyles. The most complex wellness program may include a in-house gym with a trainer, a dietician to help employees eat right, and a wellness instructor to teach employees how to deal with stress, measure employee health, prescribe ways for employees to be more healthy, write weekly wellness office emails, etc.

Some companies are unable to pay for such complex programs and have created a variation that fits their needs and budget. No matter the complexity of the program, companies that show the health insurance company that they are helping their employees be healthier will be in a better position to lower health insurance costs.

Companies looking to lower health insurance costs have a few options available to them. Creating a no-smoking environment and helping employees improve overall health are both methods for lowering health insurance costs.

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Categories: Health Care Costs,

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