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Wellness Can Mean A Trim Bottom Line

Personal Business: Insurance


In a game of word association 10 years ago, the term "wellness program" might have elicited such responses as West Coast, yoga, and granola. But now that wellness programs have spread through mainstream businesses, no-smoking policies, exercise programs, and employee physicals are more what come to mind.

Now you can add insurance discounts to the list. Several major insurers are reducing group-life premiums for companies that offer some type of wellness program to their workers. The insurers are responding to an established fact--that corporate wellness programs help save on medical bills. And healthier employees live longer.

Among the insurers cutting rates on group-life coverage are

Metropolitan Life, Prudential, John Hancock, Travelers, and Aetna. "It becomes a way for insurers to reduce their price to be more competitive," says David Wilson, a principal at benefits consultant A. Foster Higgins.

Small businesses with 25 or more employees are finding that the policy can help rein in growing benefits costs. Babson Bros., a dairy-farm-equipment maker in Naperville, Ill., saved $5,000, or 5%, on its group-life premiums this year because it has a no-smoking policy and fitness programs.

DEDUCTIBLE BREAK. A wellness program doesn't have to be elaborate or costly. If a company has a no-smoking policy, that can be enough to earn a rate cut. Also eligible with some insurers are smoking-cessation courses, fitness programs, stress-management seminars, nutrition or weight-control classes, and back care.

Babson rewarded eligible workers who reduced their blood pressure, weight, or cholesterol levels by 20% with lower health-insurance deductibles. It also picked up half the tab for those who attended a smoking-cessation course and the other half if they quit smoking for six months.

As a result, Sun Life of Canada gave Babson the 5% premium break. "We want to recognize and do business with employers who value healthy workers," says Laura Robert, director of group-life products for Sun Life's U.S. operations. The insurer shaves up to 3% off for smoking-cessation programs and 2% for fitness plans.

If your company doesn't have a wellness program, it wouldn't take much effort to enact a policy that would qualify for a group-life discount. The premium saved should offset costs. And that's healthy business.Chris Roush

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