Think that nothing can keep your health insurance premiums from skyrocketing? Think again. Here's how our midsized manufacturing firm did it.

Like many companies, Ordnance Systems saw double-digit increases in health care costs since the start of the millennium and prior to 2005, OS used cost-containment strategies similar to those favored by most companies today — raising deductibles and copays, restricting access to care and increasing its employees' share of premiums.

The negligible respite provided by these measures was quickly overshadowed by the next round of cost increases. Even the comprehensive wellness program that OS implemented in 2001 did not provide significant relief. Sound familiar?

Here's where we depart from the pack. Fast-forward to 2009: OS has continued to offer strong medical benefits without increasing employee health care premiums, thanks to the 80/20 wellness model we implemented in 2005 that has allowed us literally to freeze employee health care premiums for the last five years.

It wasn't easy. OS is located Tennessee, the center of the Gravy Belt, with a primarily blue-collar workforce whose average age is 47. We certainly weren't in the "pole position" when we developed our initial three-year plan. However, I was certain we could reach our goals.

The core design of the 80/20 wellness model is something that I created in my spare time over the last 10 years, based on my personal interest in fitness, health and well-being.

I was born, educated and spent the first 30 years of my life in Germany. When I came to the United States in 1997, I didn't have any idea how the U.S. health care system worked. That changed fast when I found myself thrust into the responsibilities of an HR agent.

An economist by trade, I used the tools I knew best, economic laws, to tackle my dilemma. Not knowing anything about the health care system actually helped me to think outside the box and devise a strategy to regain control of escalating health care costs.

The model is founded on the understanding that a minority of efforts usually leads to a majority of results (the 80/20 principle). After researching over 100 companies that were successfully managing health care costs and sampling many best practices in workplace health promotion, it became obvious that health risks like high cholesterol, high blood pressure and sedentary lifestyle are the building blocks for chronic conditions. Over 75% of all health care dollars are spent fighting chronic conditions. This understanding became the foundation of my plan.

The 80/20 wellness model presents a fully integrated approach with powerful, cost-neutral incentives, an intelligent benefits design and a success-based wellness program.

The goal is set on an individual basis, after dialogue between a nurse and the employee.

Achieving success

At Ordnance Systems, 95.9% of the workforce voluntarily participated right from the beginning, which resulted in an elimination of 235 health risks in the first six months among the participating employees.

This positive trend has continued, and we see steady employee participation (92% to 96%) in the company-sponsored biannual health risk assessments and the overall health improvement program, called Energetic For Life.

Even with a substantial initial investment of $1,000 per employee per year toward incentives designed to entice employees to make healthy lifestyle changes and eliminate health risks, Ordnance Systems was able to demonstrate a strong positive return after just 12 months. After 30 months, the ROI continued to be positive at $4.57 for each dollar invested, despite an increased monetary incentive of $2,250 per employee per year.

Insightful changes to the benefits design allowed OS to use the corresponding savings to fund 100% of the incentives. With both the initial $1,000 and current $2,250 in combined incentives, employees are excited to participate in the program, and the majority of them are more than willing to make incremental lifestyle modifications. In most cases, small lifestyle modifications are all that are required to eliminate health risks for good.

In addition, employees are eager to demonstrate their improved health at the on-site health risk assessments every six months because the results-oriented program provides significant cash incentives based on an individual employee's ability to eliminate health risks or maintain a low-risk status.

I am excited about our success over the last three years and certain this trend will continue. However, even more exciting is the fact that the 80/20 wellness model is universally applicable at companies of any size or industry — including your own. Of course, companies will have to tailor the program to their specific needs, but the underlying principle will work for companies regardless of size or industry.