Last week I outlined some of the administrative and plan design changes that have been made to significantly impact cost increases for County employees' health insurance. I would now like to discuss a more exciting and long-term approach that will create a continuous return on investment, which is the development of a comprehensive heath, wellness and prevention program that is an integral part of our health insurance options.
As with many employers in Chautauqua County over the last few years, our health and wellness efforts have included wellness screenings, numerous weight loss and exercise competitions, and offering several wellness seminars with subjects ranging from healthy heart, nutrition, and exercise. All of these activities have had the involvement and support of a significant number of our employees.
On a national level, it is clear that the comprehensive wellness programs that are supported by the employer, employee, and union leadership are successful. How is that success measured? For an experience rated and self-insured organization the cost increase is slow and in many cases, cost increases are less than the cost of living increases. Secondly, studies on successful programs consistently show employees have lower absentee rates and are more productive on the job. In many organizations, these successful prevention programs have developed the unintended benefit of decreasing workers compensation costs. Research done by groups such as the Mayo Clinic, Duke University, and Wellcoa (a national association that promotes workplace wellness), demonstrate that the return on investment can be as high as $7.00 for every dollar invested in health and wellness programs. Even at the lower end, the research shows a $3.00 return would still create tremendous cost savings.
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Our experience in health and wellness along with the documented success of this approach nationally has led us to create a health insurance option that ties together health and wellness education, on-going information and resources, and more importantly employee involvement.
Specifically, this option is a High Deductible Health Plan with a Health Savings Account (HSA) that was offered to all of the county's unions and management employees. The leadership of the Deputy Sheriff, Correction Officers and Sheriff's Supervisors unions, along with the Managers' Association agreed to allow this voluntary option to be made available to their members.
Involvement in this High Deductible HSA option requires that those involved have a mandatory blood draw. Those that are identified with risk factors such as high blood pressure, cholesterol or glucose must participate in eight, one-hour wellness classes to help them better understand their health issues and give them tools to make improvements.
Upon completion of the classes, the participants will be retested to demonstrate to them the progress they have made. To ensure continued progress these participants will have a resource person to contact who will offer them continued support and information toward maintaining their lifestyle changes. For those who have chosen this option and were not identified with risk factors but are interested in the education process, they are welcome to attend and benefit from this information. This option is an approach that I believe will significantly improve the health of our employees that participate and reduce the risk of catastrophic high cost medical episodes such as heart attacks and strokes.
This high deductible option will have immediate cost impact for 2011. The 86 employees who have exercised this option will generate a premium savings of over $150,000. In addition, the employees who are participating in this High Deductible Plan could realize a conservative estimate of $84,000 in savings.
We will have the opportunity in 2011 to closely monitor the outcomes and returns of this voluntary insurance option. This option again will be offered to all County employees in hopes of even greater cost savings for both the taxpayers and the employees, but more importantly, it will help them improve their overall health and wellness profiles. The High Deductible Plan/ Wellness Option was created by Finance Director Darin Schultz in conjunction with the Health Insurance Staff, Flexcare, Inc., and Univera.
All of the changes that have been made and new programs that have been created are responsible for saving millions of dollars and has been accomplished by a health insurance staff that is less than half the size than it was five years ago. In 2007, the Insurance Administrator position was eliminated and the Director of Finance had assumed all the responsibility for health, casualty and liability insurance, and workers compensation administration.
In 2006, the actual expense of insurance administration was over $164,000. Even with increased wage and benefit costs over the last five years, the actual expense to administer the health insurance plan in 2010 was $149,000. This is a tremendous example of doing more with less and shows that it can be done.
We have made progress in the area of health insurance costs and employee wellness but the challenge is still in front of us. We will continue to work with all of our employees to create cost effective alternatives that protect health insurance benefits of our employees and work to reduce the increases that are paid by Chautauqua County taxpayers.