Could healthier lifestyles reduce your clients’ benefits premiums?

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Could an insurance program that promotes healthier lifestyles be a win-win for the small business market, given its potential to reduce claims and associated benefits costs?

The Canadian insurance industry is starting to explore the possibilities. Wellness programs already exist in Canada, but so far, healthy behaviours have not been tied directly to premium reductions for individuals or businesses.

Last month, John Hancock, now operating as the U.S. unit of Manulife Financial, launched its new Vitality Program south of the border—a life insurance program that sees individuals earnings points for healthy behaviours such as exercising, staying smoke-free and getting regular medical check-ups. Points can eventually add up to premium savings over the policy’s life time, and can also lead to travel, entertainment and shopping rewards.

Premium reductions: a “holy grail”

Jennifer Elia, assistant vice president, Health and Wellness, Group Benefits with Sun Life Canada, says currently, the expected payoff for businesses participating in a targeted wellness program is better productivity, employee engagement and a healthier workforce. A reduction to benefits premiums is a future state, says Elia—a “holy grail” of digital health and wellness.

Sun Life, like other major Canadian insurers, is in the process of determining how digital health technology might complement traditional wellness programs. “Our approach is to recognize how quickly things are moving in this space, and perform the due diligence on behalf of our employer clients and advisor partners so we can bring clients the best solution,” says Elia.

Overcoming the obstacles

Chris Pryce, managing director, Human Capital Benefits, anticipates that tying healthy behaviours to reduced premiums may be a harder sell in Canada, where health care is publicly funded. In the US, “the impetus to make changes in employee behaviours is that much stronger,” due to high costs, he points out.

Pryce also thinks various legal and ethical issues will need to be worked out before the concept can really take off. As an example, if an employer were to issue FitBits to employees to track exercise and sleep—aiming to collect information around the clock—the “Big Brother” aspect could spark pushback from some employees.

That said, Pryce—who wears a FitBit himself—says he can see “huge positive implications” for the person being tracked. “The information you can get is empowering. You are motivated towards healthy behaviours that are ultimately going to be good for the insurers.”

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