The company's ultimate goal with the program is to cut its annual increase in health care costs for current employees by 50% in five years.
Gordon Harman, Eaton Corp.'s Vice President of Benefits
Most employers would probably add rising health care costs to death and taxes as the few certainties of life. Indeed, heath care costs per employee are expected to rise 5.9% this year after an average 5.4% increase in 2011, according to a Towers Watson/National Business Group on Health survey released in March.
Knowing this, corporate leaders continue to seek cost-cutting solutions for health care benefits. Whether they're offering more wellness programs or consumer-driven insurance plan options, companies recognize traditional approaches to health care benefits are too costly to maintain.
Diversified power-management company Eaton Corp. (IW 500/72) developed a global strategy in 2009 aimed at controlling rising health care costs. The following year, the company implemented a wellness program that focused on changing employee lifestyles, says Gordon Harman, Eaton's vice president of benefits.
The company's ultimate goal with the program is to cut its annual increase in health care costs for current employees by 50% in five years, Harman says. Eaton has already developed smoking cessation programs and is working with the Cleveland Clinic to create a healthier menu at its cafeterias.
Companies that encourage employees to adopt healthier lifestyles have experienced a much lower average heath care cost increase of 2.2% over the past four years, according to the Towers/Watson survey. "We've seen employers begin to embrace the idea of wellness programs in a meaningful way," says Ralph Bernstein, senior vice president of U.S. Bank's Emerging Strategies & Innovation group. "It says the key to lowering the cost of health care is keeping people from getting sick; not helping people recover when they do get sick."
