Work Comp Wellness Plans – Should Employers Receive An Incentive?
Should Work Comp wellness plans mimic the recent Obama Administration action on health wellness plans?
Recently, the Obama Administration had issued a rule that employees can receive up to a 30% incentive of the lowest priced healthcare policy issued by the employer’s health insurer.
Would this work in the Workers Comp market. Are there Work Comp wellness incentives already in place? Could the Workers Comp market afford allowing a 30% reduction in premiums for a well-rounded work comp wellness plan?
Actually, there are three areas where the incentives already exist in the WC marketplace. Those three are:
- Experience Modification Factor – If the employer has a wellness plan in place, the area where it would show the most effect would likely be the E-Mod (X-Mod). As noted often in the articles on this blog, the E-Mod would take up to 5 years to fully show the effect of a wellness program.
- Schedule Rating Factor – Even if the E-Mod would possibly take 5 years to show a full effect, the Schedule Rating Factor could be applied to a policy at the beginning. This may be a great area for carriers to have a marketing advantage.
- Market access – Very often in the WC marketplace, a carrier or group of insurance carriers will decide to not write a market in the state. Our trucking clients could not find coverage other than State Risk pools from 2003 – 2009. Would a carrier that is not writing a certain market change its mind if the employer had a proven wellness program? This area may be more of a projection than reality.
I have attended quite a few conferences over the years where wellness programs were covered or were the main topic. At that time, I had thought, this will never work for WC. Work Comp wellness plans may be an area to consider over the next few years.
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