I don't see how this follows. I thought up a simple mental model of how it could be implemented and I don't see why companies would flock to the insurance compa

I don't see how this follows. I thought up a simple mental model of how it could be implemented and I don't see why companies would flock to the insurance companies with no differentiation between hours worked. Let's simplify and suppose currently all employees are working 40 hours per week and the cost to provide health insurance to them is H. If it's indeed the case that workers working 30 hours per week have better health outcomes (and thus, lower health costs and lower costs to the person insuring them) then the cost to insure a 30-hour-per-week employee is L, where L < H. So the first insurance company to capitalize on this fact would set up a two tiered system where it provides health insurance to the 40-hours-per-week employees at H, and health insurance to the 30-hours-per-week employees at some P where L < P < H. They would make a short run profit if P > L. Finally, I don't see how it would induce any "flocking" away from the insurance company doing this by companies that continue to do the 40-hour-week thing. They keep getting the old rate, H, especially if we're only talking about the short-run, first mover scenario as you brought up.