Biometric-Based Health Plans

Participants in these plans can earn financial incentive by meeting targets which tend to indicate overall health.  The underlying theory can be summarized as follows:

· Employees are more likely to achieve a specified target with incentives.

· Employees who achieve targets tend to be healthier.

· Healthier employees tend to have fewer claims.

· Fewer claims lead to cost savings on the health plan.

In addition, healthier employees have less absenteeism and fewer work-related accidents and injuries.  They tend to be happier and more productive, providing benefits and cost savings beyond the health plan itself.

Most other wellness plans encourage or reward participation alone, rather than focusing on the achievement of specific health outcomes.  Typical biometric plans have three key components:

· A major medical plan with a high deductible for catastrophic coverage.

· A vendor conducts tests on plan participants, either limited to employees or expanded to include spouses and other dependents.

· Participants receive financial incentives for each achieved target.  Most often these incentives are funds which can be used to offset the major medical plan deductible.

Employers can choose which biometrics to measure as well as the targets which must be achieved to earn incentives.  The most commonly measured biometrics include tobacco use, body mass index (BMI), cholesterol, glucose and blood pressure.  Employers can also adopt a point-based system to reward other activities not directly connected to biometric testing, such as participation in a walking program or attending wellness seminars.

Biometric-based plans must satisfy certain legal requirements.  Although the employer may see aggregate data on test results, HIPAA and ADA regulations restrict employer access to individual test results.  Only the testing vendor knows individual results.

From Benefits & Compensation Digest, February 2009 issue, pp. 1, 13