What are health insurance rewards programs, and how do they impact HRAs?

In a recent survey, the American Osteopathic Association¹ found that 71% of Americans rate their overall health and wellness as good or excellent. When asked what areas of their lives they’d like to improve, the top choices were physical health and financial stability.

A health insurance rewards program provides solutions to both. It's a way to incentivize healthcare consumers to take a more active role in managing their health and wellness.

In this article, we'll explain how health insurance rewards programs work, how they can benefit you, and how they impact employee benefits like health reimbursement arrangements (HRAs).

Does your employer offer an HRA? Learn how you can get reimbursed for your healthcare expenses in our webinar

What are health insurance rewards programs?

Similar to workplace wellness programs that reward employees for healthy activities, a health insurance rewards program is designed to motivate policyholders to engage in healthy habits. They promote healthy activities for members, such as eating well, staying active, achieving health goals, scheduling annual checkups, and completing preventive screenings.

When insurance policyholders actively participate in health-related activities, they get rewarded. These programs typically offer incentives, such as reduced monthly premiums, cash rewards, prepaid debit cards, gift cards, or rewards cards that members can use to purchase merchandise from the insurance company's online store.

Here are some common incentives typically offered by health insurers:

• Someone who attends a smoking cessation class receives a $25 reward.
• Members can earn a $50 gift card if they see their primary care doctor for an annual wellness screening.
• Policyholders receive a $50 e-gift card after they complete a health risk assessment on the insurance company's secure portal.
• Anyone who receives a flu shot during flu season gets a $10 cash reward.
• Members who complete a biometric screening receive a $25 prepaid card.
• Policyholders can earn up to $100 a year by hitting their daily step goals after they sync a step tracker with their insurance company's mobile app.

Each type of health insurance rewards program will come with its own unique awards, activities, and restrictions. Some health insurance companies also offer discounts on wellness-related services such as meal plans, health clubs, gym memberships, and weight management programs.

What insurance companies offer health insurance rewards programs?

While health insurance rewards programs have been around for traditional group health insurance plans, they are relatively new to individual plans on the Affordable Care Act (ACA) marketplace. According to HealthInsurance.org², many incentive programs debuted in just the last year or so.

Health insurance companies are increasingly offering these incentive programs to keep members healthy, which in turn helps keep healthcare costs low. It also helps these insurers retain their existing customers by keeping them happy and engaged while they draw in new ones.

So, how can you cash in on these rewards programs? Well, you might not know about them unless you ask around. An insurance broker can help you find plans that include wellness rewards and incentive programs as perks. You can also reach out to the insurers directly by phone or through their websites.

The benefits of health insurance rewards programs for policyholders

People who participate in health insurance rewards programs reap several benefits. By meeting health-related goals and earning incentives, members can reduce their healthcare costs and improve their overall health. Additionally, these programs encourage people to take a more active role in managing their health, which can lead to better long-term health outcomes.

For example, a policyholder can make it a point to quit smoking or to lose weight. If they work diligently to achieve that health-related goal, their insurance company will reward them for their efforts through the incentive program. Plus, they'll improve their quality of life in the process. A health insurance rewards program gives many people the push they need to take steps toward a healthier future.

How do health insurance rewards programs impact HRAs?

HRAs are employer-funded health benefits that reimburse employees for their qualified medical expenses. The employer sets the monthly allowance amount, and their employees choose the services that are right for them. When employees submit qualified expenses, their employer reimburses them up to their allowance amount.

Some HRAs can be paired with group health insurance plans, such as high-deductible health plans (HDHPs), to help employees cover out-of-pocket costs. Other types of HRAs reimburse employees for their individual health insurance monthly premiums and out-of-pocket medical expenses.

When an employee participates in a health insurance rewards program, one of the incentives an insurer may offer is a discount on their monthly insurance premium. If they do receive a reduced premium, they will need to adjust their HRA premium reimbursement requests to exclude the amount they didn’t pay for.

If your employer uses PeopleKeep and you already have your monthly insurance premiums in our software, you can edit your premium reimbursement requests at the bottom of your employee dashboard. You can do this for the months when your premium amount has changed.

How employers benefit from health insurance rewards programs

There are also several advantages for employers who choose to offer health insurance rewards programs. First off, insurance companies offer them at no additional cost. These programs help reduce healthcare expenses by motivating employees to take a more proactive approach to their health. When employees take better care of themselves now, they can prevent serious health conditions such as heart disease, stroke, and diabetes in the future.

By encouraging employees to adopt healthy behaviors, employers can also reduce absenteeism and improve productivity. When employees feel their best, they're less likely to take frequent sick days. Plus, with reduced stress over finances and health issues, it's easier for employees to focus at work.

Additionally, offering rewards programs can help employers attract and retain top talent. MetLife’s 2022 U.S. Employee Benefit Trends Study³ found that 52% of employees say health and wellness programs are a must-have employee benefit. Additionally, survey results showed that holistically healthy employees are 74% more likely to be satisfied with the job they have now.

Conclusion

Health insurance rewards programs are growing in popularity, especially for individual insurance plans. They reward people for making healthy decisions. These incentive programs can benefit policyholders by reducing their healthcare costs and promoting better health outcomes.

Since health insurance rewards programs can be tied to individual health insurance, they can also impact HRAs.

This article was originally published on June 7, 2023.

1. https://findado.osteopathic.org/71-of-americans-report-good-or-excellent-health-and-wellness
2. https://www.healthinsurance.org/obamacare/aca-health-plans-increasingly-offer-wellness-incentives/
3. https://www.metlife.com/content/dam/metlifecom/us/noindex/pdf/ebts-2022/MetLife_EBTS_2022.pdf