Healthy Measures Employee Insurance Plan
Safeway has designed an innovative, market-based employee health insurance plan that has kept per capita health-care costs flat between 2005 and 2009 (including both the employee and the employer portion), while most American companies' costs have increased 38% over the same four years.
The Safeway Healthy Measures plan capitalizes on two key insights. The first is 70% of all health-care costs are the direct result of behavior. The second insight is 74% of all costs are confined to four chronic conditions: cardiovascular disease, cancer, diabetes and obesity. Furthermore, 80% of cardiovascular disease and diabetes is preventable, 60% of cancers are preventable, and more than 90% of obesity is preventable. Safeway's insurance program focuses on tobacco usage, healthy weight, blood pressure and cholesterol levels, using a provision in the 1996 Health Insurance Portability and Accountability Act that permits employers to differentiate premiums based on behaviors.
Safeway's Healthy Measures program is completely voluntary and currently covers 74% of the insured nonunion work force. Employees are tested for the four measures cited above and receive premium discounts off a "base level" premium for each test they pass. Data are collected by outside parties and not shared with company management. If they pass all four tests, annual premiums are reduced $780 for individuals and $1,560 for families. Should they fail any or all tests, they can be tested again in 12 months. If they pass or have made appropriate progress on something like obesity, the company provides a refund equal to the premium differences established at the beginning of the plan year.
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