Employee wellness works in Lewiston, Maine.

• Author: Barrett, Edward A.
• Position: Solutions

Employers often react to an annual premium notice from their employee health insurance provider by scurrying to evaluate options, issuing RFPs to seek new providers, and reviewing benefits to see if reducing them can offset the new, higher cost. Employees are asked to pay a larger cost share and frequently have to choose between fewer benefits or smaller take home pay. But it doesn't have to be this way--there are steps managers can take to exercise some control over costs without significantly reducing plan benefits, placing greater burdens on employees,

increasing taxes, or reducing services.

At the heart of Lewiston's healthcare cost control effort is an employee wellness incentive program designed to reduce the need for expensive health services and improve the overall health of city employees. The city also purchased insurance through the Maine Municipal Employees Health Trust, which helps manage rate volatility through group size, and started allowing employees who opted out of health-care coverage to take lump sum payment, upon showing proof of other coverage. These measures have made a difference, leading to improvements in leading health measures.

WELLNESS INCENTIVE PROGRAM

In response to escalating healthcare costs, the City of Lewiston, Maine, embarked on a comprehensive and multi-faceted effort to control costs. Lewiston is Maine's second largest city, with a population of about 35,000 and 340 employees. One of New England's early textile mill centers, the community has worked hard over the last 30 years to diversify its once manufacturing-based economy by expanding into health care, education, warehousing and distribution, finance, and precision manufacturing. The economic dislocations initially resulting from mill closures, along with the need to invest heavily in infrastructure and redevelopment, have stressed local budgets and financial capacity. The city needed greater efficiency and cost control to continue meeting the service and capital needs of the community at an affordable price.

In 2006, Lewiston initiated an employee wellness incentive program in response to the rapidly escalating cost of health insurance and the desire of city employees and their bargaining units to maintain a quality, full-service health-care plan. The goals of this program are to:

* Reduce the overall need for healthcare services and prevent disease by rewarding employees for healthy behavior.

* Hold down the cost of health insurance for both the city and employee, Before 2006, employees paid 10 percent of their salaries toward the cost of health insurance coverage. In 2006, working closely with the city's six bargaining units, Lewiston increased that amount to 25 percent for employees hired before July 2007 and 35 percent for those hired after that date.

At the same time, premium incentives and wellness goals were established that allowed participating employees to reduce their share of premium costs by up to 15 percent. Employees and spouses who participate in an annual health risk assessment provided by the city and a physical exam by their personal care physician can reduce the 25 percent or 35 percent they are required to pay back to 10 percent or 20 percent. They can do this by:

* Participating in an...