All about Employee Wellness Programs.

In this recession economy and out-of-control employee debt, many corporations who don’t have automatic 401(k) enrollment have seen participation drop.

Here’s how one small corporation in Arizona cleverly tied 401(k) education to employees’ other financial concerns. Rather than simply holding its usual 401(k) open enrollment education meeting, it held a “financial wellness fair.”

Stressed 401(k) importance

How it worked –  on the same day the company’s 401(k) vendor sent a plan rep to discuss the retirement plan, the business also arranged for a qualified financial planner to speak to staff members.

The financial planner went first. She started the session by pointing out that she wasn’t affiliated by any method with the management of the 401(k) plan.

That was crucial both for the company’s legal protection under ERISA and for building trust with employees. She then discussed why it’s crucial for individuals  to take part in the 401(k) plan, and offered attendees budgeting tips and basic strategies for cutting their debt.

The financial planner’s talk cut to the heart of a few major issues that hurt both worker salary satisfaction and 401(k) participation. Numerous studies show that the No. 1 reason many people  avoid 401(k) participation is that they feel they can’t sacrifice any part of their entire paycheck and still survive financially.

The second part of the session was the standard 401(k) enrollment presentation from the provider. End result – Employees were more attentive and there was a noticeable uptick in both new 401(k) enrollments and salary contributions from already-enrolled workers.

The event was such a smash that the corporation plans to make the Financial Health Fair a regular part of 401(k) enrollment. While the financial planning advice is generic (the corporation may add third-party personal finance planning as a voluntary benefit in the future), it’s also timely.

The 401(k) signup appeal comes while the financial planning tips are still fresh in employees’ minds and they’re aroused to do something to help themselves.

Looking for incentives to get overweight personnel to purchase into a wellness program? A recent study  suggests many personnel are even willing to pay much â.” or all â.” of the cost themselves.

Roughly 35% of firms with health promotion programs focus on providing workforce with convenient access to weight reduction resources.

A poll of 1,352 staff by the Strategies to Overcome and Prevent Obesity Alliance found that many people  would gladly chip in for the cost of the health promotion program when they believed it would help them lose weight. What staff want -

o  confidential support and counseling

o  Access to a specialist nutritionist or fitness trainer, and

o  onsite exercise plans.

Until recently, only large companies were able offer such wellness programs as part of their wellness benefits.   But the fastest growth of these wellness programs in the last two years has been in smaller firms (sometimes with as few as 50 full-time employees).

The majority of firms split the cost with employees. Normally, employees pay up to about 25 percent of the cost. But some plans are fully worker paid.

Studies show that roughly five percent of workers drive about 80 percent of your health benefit costs.

No shocker here –  Smokers and obese employees are the highest risk group for developing the sorts of chronic medical problems that send costs through the roof.

A small, but rapidly growing number of corporations are taking desperate measures to avoid the costs associated with these workers.  The step could be broken down into three levels of aggressiveness and potential risk/reward.

Level one –  the corporation installs a wellness program in which non-smoking personnel and those who commit to maintaining a healthful weight receive financial incentives that lower their share of monthly insurance premiums.

Level two –  the company disqualifies job candidates who smoke or are significantly overweight from hiring consideration. Alternatively, some firms require new hires to undergo a health risk assessment as a condition of being hired.

Level three –  the corporation docks pay or fires workers who fail to control their lifestyle-related health risks. Example –  A organization called Clarian Health has sent notifications to workers that starting in 2009, workers who smoke or chew tobacco will be charged $5 per paycheck.

Are these strategies legal? at level one, the answer is a licensed yes. HIPAAs non-discrimination rules permit such incentives under several conditions.

Wellness incentives walk a fine line as for health insurance portability and accountability act (HIPAA)s non-discrimination rules. It’s legal to reward employees for wellness participation but its illegal to punish those who fail to improve their health.

Example – When an employee follows a weight-loss program in good faith but fails to lose weight, you can’t withhold the incentive. In like fashion, when an employee fails repeated tries to quit smoking, you’re still legally obligated to give them another shot next year.

Additionally rememberthat, by law, the size of the reward or penalty under your health promotion program cant exceed 20% of the sum cost of coverage.

The other two are still largely uncharted waters in the courts. Corporations considering these policies should proceed with extreme caution. Keep in mind that the question of “can you do it” (i.e., is it legal?) is different from “should you do it?” (i.e., is it good business?)

Wellness programs come in all shapes and sizes. But regardless of plan design there are five common components that set the successful health promotion programs apart from the rest.

At their core, health promotion programs require constant monitoring and periodic adjustments.  The health promotion programs that get mediocre results are the ones that are left to run on autopilot. That’s why it’s critical to -

1. Know thine enemy You have to know what’s driving your biggest claim costs on your health care plan – both among workforce and their dependents.

2. Develop realistic expectations. With wellness, what an business gets will almost always depend on how much it spends, how well it plans and how well it sustains communications with participants and the provider.

3. Maintain strong communications.  The wellness programs that achieve the greatest success are those which are communicated aggressively from the get go and are sustained. Repetition is your friend when doing worker education.

4. Integrate wellness with other benefits. Real-life experience has shown that you should consider your worker assistance programs (EAPs) an extension of the health promotion program. You should also consider issues like absenteeism, disability and worker’s compensation to be pieces of the wellness puzzle.

5. Practice what you preach.  The key to ensuring worker buy-in is for upper management to lead the health promotion program by establishing a positive example. If senior managers are unwilling to participate and address their own health issues, don’t expect many personnel to take the health promotion program seriously.

Here is more evidence that health promotion programs pay for themselves -

Over the last two years, one company in five has seen meaningful betterment in employees’ health status â.” and began to stabilize their costs â.” as reported by one study.

Among firms noting improvement, almost two-thirds (64%) feature health promotion programs offering incentives for healthier life choices.

Here are three twists on traditional incentives that’re getting good results -

1. Health coach outreach

A lot of firms require staff members to work with a personal wellness coach for get a discount on monthly premiums or earn cash incentives.

The most common set-up –  on a regular basis, the worker must set up appointments with and report to (either over the phone or face to face) his or her health Coach.

But experience has shown there’s often a high dropout rate.

People  get off to a great start â.” and they’re enthusiastic about the incentive â.” but once they realize there’s some effort involved, they lose interest.

The good news –  Firms have found a simple-to-arrange alternative that keeps individuals  on the right track. Rather than requiring workers to contact the wellness Coach, a growing number of corporations require participants to take calls from the wellness Coach.

Potential result –  Fewer folks fall off the wagon. There’s no outreach effort involved, and the wellness coach keeps people  accountable.

2. Nutritional education/therapy

A newer â.” and cost-effective â.” feature in the battle against worker obesity –  offering an worker nutrition-education program administered by a professional nutritionist.

Just 11 percent of companies â.” 18 percent  of big businesss and 7.5 percent of small to medium ones â.” have such health promotion programs, as reported by SHRM’s most recent benefits survey.

Even fewer offer (via their EAPs) nutritional therapy for people  with eating disorders. But available data on these health promotion programs shows they usually pay for themselves.

The stronger the firm’s emphasis on teaching healthy consuming, the faster and more dramatic the reduction in major health claims.

Common plan features –  lunch and learns featuring healthful food choices, giving out nutrition-linked gift cards and extending obesity-prevention incentives to people ’s family members.

3. Aggressive smoking cessation

A small, but quickly growing number of businesss are taking more aggressive measures to avoid the costs associated with workforce who smoke.

The step may be broken down into three levels of aggressiveness and potential risk/reward.

Level one –  the employer installs a wellness program in which non-tobacco use personnel and those who commit to maintaining a healthy weight receive financial incentives that lower their share of monthly premiums.

Level two –  the company disqualifies job candidates who smoke from hiring consideration. Alternatively, some firms require health risks assessments as a condition of being hired.

Level three –  the company docks pay or fires personnel who fail to control their lifestyle-related health risks.

Example –  Clarian Health made news last fall for sending notice to staff that as of Jan. 1,  2009, individuals  who smoke or chew tobacco would begin be charged $5 per paycheck.

Are these strategies legal? at level one, the answer is a certified yes. health insurance portability and accountability act (HIPAA)s non-discrimination rules permit such incentives within limits.

In a nutshell, it’s legal to reward workers who quit use of tobacco but illegal to punish those who try and fail. When an worker tries but fails to quit use of tobacco, you’re still legally obligated to give them another shot next year.

In addition rememberthat, by law, the size of the reward or penalty under your health promotion program can’t exceed 20 percent of the sum cost of coverage.

At levels two and three, it remains to be seen when such policies would hold up in court. Proceed with caution.

Wellness programs are a long-term investment. But how long should you wait for results?

Finance and the CEO want hard numbers to show Return On Investment.  And wellness Return On Investment is tougher to calculate than, say, a 401(k).

18-month guideline

Recent studies have established some benchmark data on wellness Return On Investment (ROI) you are able to use as a guideline. It’s useful whether you already have a health promotion program or are thinking about beginning one.

It ordinarily takes at least 18 months from the launch of a health promotion program to see any causes your health care plan bottom line.

For a lot of firms, 18 months is the point at which workers’ improving health starts to cancel the cost of sponsoring and administering the wellness program.

By and large, the long-term cost savings from a health promotion program will be driven by how much you’re willing to spend. Normally, businesses get what they pay for â.” both in time and money invested.

As a rule of thumb, the typical cost to the business is about $3 to $5 per participating staff member per month. Within three years of launch, you should be seeing meaningful savings.

The average Return On Investment tends to be about $4 to $5 saved for every dollar spent. So how can you manage the costs in the short-term for achieve the long-term savings?  and how can you maximize the long-term payoff?

Consider making health promotion programs budget-neutral

For many employers, the most effective way to manage the cost of a health promotion program in the start-up phase is to make it a budget-neutral expense.

In other words, the health promotion program neither adds to your medical costs at the outset, nor reduces them. Example –  You plan to roll out a health promotion program effective Jan. 1.  The health promotion program will cost the corporation $5 per staff member.

You can roll the $5 per month cost directly into the employee’s monthly share of their healthcare premium. In this age of continuous cost-shifting, most workforce are used to seeing small increases in their monthly contributions each plan year.

Just be sure you’re not hitting folks with a big hike on top of that $5. Comparably designed wellness programs pay off about the same â.” meaning employees buy in and participate at the same rate â.” whether they’re budget neutral or the employer absorbs the cost.

But when workers get clobbered by large-scale contribution hikes at the outset, they often resist the wellness program.  The long-term Return On Investment for these wellness programs is often disappointing.

When you’re faced with a situation where achieving a budget-neutral health promotion program would trigger push-back, your firm is better off absorbing most or all of the wellness costs.

The biggest hurdle is to get over the hump for those first 18 months or so.

A few years ago, business health fairs were all the rage. Now they’re making a comeback, with a slight twist.

In the past, the fairs often better served the provider(s) who came onsite than the needs of the hosting corporation or their staff. More recently, businesses have refined the planning of the events to serve in particular to launch or promote a wellness program.

To be successful, the events need to serve two purposes – boosting employee education and building their enthusiasm to take part in the health promotion program.

To be sure you and your employees get the most out of a health fair, it helps to be alert to the plusses and minuses – and some little touches that can mean the difference between a so-so event and a hit.

Health Fairs –  Double-edged sword

On the plus side, staff received easy-to-grasp information on key wellness topics like disease detection, symptom control and smarter medication practices. They also receive important services like free blood-pressure screenings.

On the down side, some professionals said the more newfangled events were more like “disease fairs” than “wellness fairs.” In other words, the tone was little too somber and workers weren’t particularly tuned in because they weren’t enjoying themselves.

Health Promotion program advisor Dr. Ron Goetzel believes that the savviest firms strike a balance in their wellness fairs. Stick with the screenings, but also feature exhibitors who offer “lighter,” more enjoyable services. Examples -

o  A booth from a local health-food store

o  A chair-massage station

o  elder-care info from the AARP, or

o  A “complimentary medicine” info booth (e.g.,a chiropractor or an acupuncturist).

Offering incentives

In many cases, employees still need an incentive to attend the fair and get the desired screenings, in addition to doing the fun stuff. Some real-life wellness programs that’ve worked -

o  A contest offering prizes to personnel who visit every station

o  quizzes and prizes based on info from different vendors’ literature

o  flex-scheduling or time-off incentives for getting screened (e.g., a comp day or an extra afternoon off), and

o  cash incentives (as little as $20 and as much as $100) to people  who voluntarily take part in various screenings.

Medical research has long shown quitting tobacco use at any age can improve a person’s health.

But a Duke Univ. shows that the group you may think would be the least likely to quit – people  over the age of 50 – might actually have the best odds for quitting through a use of tobacco cessation program.

Researchers tracked 573 older patients over 10 years. They found that just 16 percent of those who joined the tobacco use cessation program later returned to tobacco use.  Meanwhile, previous research has found young smokers who try to quit have a 35 percent to 45 percent relapse rate within two years.

Bottom line –   Given the aging employee population and the cost of retiree health care, you might want to keep attempting with use of tobacco cessation education for your older workers.

The businesses with the most cost-efficient heath programs are the ones that streamline the services workforce receive for both their physical and mental health.

As a long-term goal, having your general health plan, worker assistance program (EAP) and health promotion program communicating regularly with one another about employees’ treatments is the single best way to reduce redundant or contradictory treatments, eliminate unnecessary claims and increase the quality of the plans for which you pay.

Let’s look at the relationship between your health promotion program and your EAP to illustrate the importance of attacking health care costs cross a wide front.

You can start a health promotion program with a health risk assessment and then, when appropriate, roll out a smoking cessation program or a weight loss program.

But ultimately you want to be sure that your wellness vendor works paired with your employee assistance program vendor.

Here’s why –  It’s very common for an employee to contact the employee assistance program (EAP) because the individuals feels depressed about his or her weight. What you want is for the employee assistance program (EAP) provider to treat the employee’s depression and behavioral issues, plus you want the employee assistance program (EAP) to refer the employee to the wellness program to deal with the root cause of the problem – obesity.

The same thing accompanies the relationship your wellness program and your workers’ comp provider, STD and LTD providers, rehab people , and/or illness managers. You want all them talking to – and sharing data with – each other. If they’re not, it’s costing you money.

In general, the businesss who achieve the greatest cost savings through their wellness programs are the ones who overlap wellness with behavioral and occupational health issues.

Trying to do more with less money? Here are three proven ways to align the dollars and cents of a health promotion program in your budget.

Common thread –  the way you prepare â.” and control â.” your budget for a wellness program is crucial to its success.

1. Top-down health promotion budget

Depending on the size of your business and wellness program, you could have full budget responsibility or may need to work with a C-level who has budgeting expertise.

Regardless of the arrangement, you’re likely to face one of two distinct challenges –  a top-down budget or a zero-based budget.

A top-down budget is when you’re given a finite dollar amount and told to run the health promotion program within the limit. When that’s the case, here are three vital questions to ask -

o  Does this limit include money set aside for staff member incentives and future programs?

o  Should we keep long-tenured wellness programs that keep going up in price, and

o  Does Benefits/HR have to deliver all education about the wellness program, or is there extra funding to hire staff?

2.  Zero-based wellness budgeting

In zero-based funding, you submit to senior level management an itemized list of the wellness programs/features you want and the cost of each. Best practices -

o  Rank wellness programs by priority (health-risk assessments should be at or near the top)

o  Indicate which costs are fixed and which are variable, and

o  List ways to incorporate existing resources (like an EAP program) for a better return on investment.

3. Estimating wellness ROI

On average, wellness programs usually take at least 18 months to break even. After three years, you should see savings.

If not, it’s time to take a fresh look at the wellness program design.