From Financial Risk Management to Promotive Health: A Paradigm Shift in Employer-sponsored Health Insurance?

Abstract

Health insurance serves to contain financial loss arising from an insured individual’s healthcare costs. We investigate an evolving paradigm shift in employer-sponsored health insurance by which workplace health promotion has increasingly gained coverage. The question for analytical investigation is why and how the Affordable Care Act (ACA) succeeded in integrating health promotion into private health insurance in the United States. Survey data (2008–2020) from the Employer Health Benefits, Annual Survey was disaggregated by insurance attributes and employer characteristics relative to health promotion benefits. Pertinent regulatory policies were content-analysed. The ACA offers a viable policy vehicle for mandating strategic, ex ante coverage of preventive and wellness services, and chronic disease management, nudging insurers to offer related benefits. Such policy is underpinned by insurer and employer incentives, including state-based individual mandates, the medical loss ratio, state-driven workplace initiatives and employee participation rewards. While health promotion reduces long-run healthcare costs and risk of disease and improves worker health and productivity, absent carefully devised incentives and rewards, compelling insurers and employers to cover promotive health is unlikely to achieve the objectives and imperatives of healthcare reform. Such policy could even have adverse, albeit unintended, consequences that outweigh their intended outcomes, as insurers may devise ‘backdoor’ strategies once regulatory costs become burdensome.