health Insurance Article

Wellness Programs Prospering or Failing?

We’re bombarded with messages on how to stay healthy every day. a-jumpinggroup

Stop smoking.

Eat more vegetables.

Get daily exercise.

Find a stress outlet.

Develop good sleep hygiene.

Take vitamins.

Needless to say, it’s much easier said than done. Perhaps that’s why the French have the saying

“eat right, don’t smoke, and you die anyways.”

That’s really not the best motto to live by though (even though the French have a reportedly lower incidence of heart disease than Americans, despite their perceived image of being chain-smoking, espresso drinking, bicycle riding people whose diet primarily consists of saturated fats), so ironic it’s known as the French paradox.  There’s unfortunately nothing humorously ironic about the fact that America is far from the healthiest nation in the world. A recent study examined 17 developed countries including the US that included nations like Japan, Sweden, and the United Kingdom. Out of every country, the US reportedly grabbed the honor of having the most deaths from all causes.

The study reported that Americans “suffer more deaths from alcohol and other drugs, and endure some of the worst rates of heart disease, lung disease, obesity and diabetes.” Obesity has been on the rise, with nearly 34.2% of adults now obese, which contributes to a host of other health problems.

McDonald’s isn’t the only one attempting to at least try combatting the increasing problem of obesity, its consequential health issues, and similarly unhealthy habits. These health problems are affecting American businesses, and what may have once been deemed as unhealthy choices that would only affect the person making them are now being deemed as taking money from everyone’s pockets, and in the bigger picture, the economy.

So why would a business care if John has a penchant for Big Macs, or if Jane smokes? The statistics say it all: Healthy employees are generally more productive, take fewer sick days, and contribute to a positive workplace community. Employees with a sense of overall wellbeing have 41% lower health costs than unhealthy employees. That’s significant savings for individuals – but it’s especially significant for businesses when many employees are involved. For example, for a company with 10K employees, that totals to approximately $30 million. The one on one comparison of costs for employee to employer even shows the dramatic difference for employers:

  • Average cost to an employer for an unhealthy employee: $11,709
  • Average cost to an employer for a healthy employee: $4,395

Those are significant numbers that affect a business’ bottom line, especially in health insurance costs. So how can this be fixed whether you’re an employee or employer? You can’t beat occasional sickness, but it’s chronic conditions related to lifestyle and behavior choices that can be changed. Although businesses aren’t allowed to inquire about medical history during the hiring application, there are ways to encourage healthy behavior at work. The possible answer is way beyond watching a video on office ergonomics.

Wellness programs are one way to promote positive change in the workplace, but some question their effectiveness, believing wellness programs can lead to punishment for unhealthy workers. As an individual, you understand the struggle associated with making healthy choices on a daily basis. Cheeseburger or spinach salad? Trying to convince someone else to make an entire lifestyle change can be a huge effort, akin to trying to talk a long-time smoker into quitting, which also happens to be just one of the many facets worked into wellness programs. Considering difficulty similar to that scenario, are wellness programs a way to get healthier employees?

The Building Blocks of a Wellness Program

Although wellness programs are varied, the main goal of each is to promote healthy changes for employees. Most are built upon the idea of improving fitness, nutrition, and helping employees stop smoking. How wellness programs accomplish this is through offering incentives. Some incentives are minor, and others are well worth the extra effort. Almost 90% of employers offer some form of wellness incentives, but just because it’s available doesn’t mean it’s always successful and certainly isn’t an easy fix according to Aon Hewitt wellness consultant Stephanie Pronk.

“Incentives themselves are not the silver bullet. It’s really important to change up the incentive design and keep people on their toes,” says Pronk.

Consider the questions each major type of employee wellness program incentives provokes:

  • Educational/Awareness Incentives: If employees complete an activity providing them with knowledge about personal health issues, they’re given a monetary incentive. But, just because you know about a problem doesn’t mean you’ll take action to solve it. Ever watched A&E’s Intervention?
  • Action Based Incentives: Higher rewards come with increased action, like joining a weight loss program, but will the positive behavior continue once the program ends and the employee has the money?
  • All Inclusive Incentives: With this plan, employees have more options to gain incentives, meaning your yoga class could end up paying you. But will the employees with health concerns be interested in participating? Sometimes, too many choices can just be overwhelming.
  • Progress Based Incentives: While this offers motivation for reaching healthy stepping stones, there needs to be support along the way for workers who have a long road to getting healthy, such as those who are seriously obese attempting to lose weight.
  • Outcome Based Incentives: This model incorporates incentives as well as penalties. Didn’t hit your weight loss goal for the month? You now owe the company $20. Refuse to quit smoking? You get $50 taken out of your paycheck. You can imagine how this can be discouraging to workers and thereby limit their participation.
  • Targeted Incentives: Working with your insurance company, the company is able to create a personalized wellness program for you, but some people don’t like the level of involvement, as it may feel like the wellness program version of micromanagement.

With so many options for wellness programs, deciding which one is the best fit for your company is a hard decision. However, many businesses are powering through the many choices and placing their faith in a system that could be described as slightly similar to the old-fashioned parenting approach of reward and punishment behavior.

The Popularity of Wellness Programs

According to a recent survey by Willis North America’s Human Capital Practice, 60% of businesses had some form of wellness program, up 13% from 2010. Of those surveyed, 44% had a basic program, 40% had an intermediate program, and 17% had a comprehensive program. Even with a high number of wellness program participants, there were still challenges though. Most programs claimed lack of support was the number one problem, followed by budget issues, and a high stress environment. It’s hard to take a 15 minute break to walk around the parking lot when you have a stack of folders on your desk due at 5PM.

Of course, when employees take care of themselves, the company also benefits. A report published in the American Journal of Health Promotion examined the return of investment (ROI) for companies offering wellness programs. The study found employers had fewer medical costs and an average ROI of $2.05 to $3.64 for every $1 spent on a wellness program. The numbers can be convincing: Johnson & Johnson offered wellness program incentives to employees to stop smoking beginning in 1995. Since then, the number of Johnson and Johnson’s smoking employees has dropped by two-thirds. Overall, that move saved the company $250 million on health care costs.

With such convincing numbers, it’s hard to wonder why every business hasn’t hopped on the wellness care bandwagon. If a healthy employee means a happy employee and thus means a more productive employee, ultimately meaning more money, what’s the hesitation other businesses have? Is starting wellness programs difficult? Too expensive? A lost cause? Most of all, do they even work?

Do Wellness Programs Really Work?

The effectiveness of wellness programs really depends on design. Considering the main incentive based plan types, it’s easy to see that some models encourage and others discourage, but the fact of the matter is that no model is perfect. If employees see an employer has a true interest in improving overall health, a program is more likely to pay off for everyone involved. But how many people are actually involved?

The RAND Corporation, a non-profit organization dedicated to improving policy and decision making by utilizing research, conducted a review of wellness programs sponsored by the US Department of Labor and US Department of Health and Human Services. While those participating in the programs stopped smoking, were working towards a healthy weight, and staying active, only 20% of eligible employees were participating. Is that just the employee’s loss? Not at all – non-participating employees still cost a company more in health insurance costs.

Although an incentive based model is currently the standard, researchers from RAND say “the use of incentives to promote employee engagement, while increasingly popular, remains poorly understood, and it is not clear how the type (e.g. cash or noncash), direction (reward versus penalty), and strength of incentives are related to employee engagement and outcomes.”

Establishing a successful wellness program isn’t about setting up a booth with brochures on how to prevent diabetes or lower cholesterol. According to Jeffrey Harris, Director of Health Promotion Research Center at University of Washington, “it’s hard, and it’s hard to outsource that to an outside firm, so most companies don’t try.”

To truly implement a wellness program that works requires a lot of effort, but luckily standards are emerging that are helping businesses and employees take advantage of increased health. Some of these efforts include:

  • Paying for services like nutrition counseling and those assisting with disease management like diabetes.
  • Moving above the numbers game and truly providing a concentrated support effort for helping employees reach goals.
  • Allowing for a reasonable amount of time for achieving goals and celebrating small successes.
  • Ensuring employees who cannot reach goals aren’t saddled with extra health insurance premiums.
  • Increasing reporting efforts, which help a company understand what employees need and what works.

Employees and Wellness Programs

Of course, any successful wellness program needs employees, but many are left with questions after an initial set-up meeting. Transparency is an important part of successful wellness programs. Employees are more likely to participate in a program if their aware of personal benefits. Unfortunately, many employers implement a basic plan with little follow through. To see the true benefits, a wellness program requires consistent effort. Employees need to know why a wellness program is being implemented.

A good example is auto insurance: Bad drivers typically pay higher premiums for auto insurance. Employers pay high healthcare costs if their workforce consistently makes claims. This drives the price of health insurance up because all employees are grouped within the same risk pool. With a group effort to become healthier, over time, insurance costs are reduced for companies, which also benefits employees.

But some are afraid wellness programs isolate certain employees who may not want to participate, driving up healthcare costs unjustifiably and perhaps worse, for everyone. Could wellness program programs lead to a sense of non-wellbeing?

Nay: The Argument Against Wellness Programs

One of the main reasons wellness program opponents cite is because they just don’t think programs are effective at targeting those who really need help. Others are afraid that wellness programs can single out certain employees unfairly.

Al Lewis, founder and president of the Disease Management Purchasing Consortium International, says it all comes down to the employee, and the resulting expectations could prove disappointing.

“The strongest predictor of whether someone will lose weight or stop smoking is how motivated they are. Since the programs are usually voluntary, the most motivated employees sign up. That makes it impossible to credit the programs with success in smoking cessation or weight loss rather than the employee’s motivation.”

The Affordable Care Act (ACA) expands wellness programs, gives employers the option to discount premiums, lower deductibles, and waive certain healthcare requirements for participating employees and do well. However, it also allows employers to raise premiums and deductibles for those who don’t meet goals. Could raising costs for those who need it most be a byproduct of wellness programs? If it’s mismanaged, yes.

Other opponents worry about discrimination within the workforce due to wellness programs. The Equal Employment Opportunity Commission (EEOC) held a meeting to explore how to protect certain employees with health concerns and disabilities.

Jennifer Mathis, with the Consortium of Citizens with Disabilities (CCD), is worried about the use of penalties in wellness programs, stating in her written testimony that she and the CCD “are concerned that employer-based health programs which penalize people with disabilities for being as ‘well’ as others — and for failing to disclose disability-related information that the Americans with Disabilities Act (ADA) permits them to keep confidential in order to avoid discrimination — make it even more difficult for individuals with disabilities to obtain employment on fair and equal terms.”

Another consideration included was that women statistically get sicker than men, and those 40 and over tend to suffer from health problems, which could both lead to violations of the Civil Rights Act and the Age Discrimination in Employment Act. As wellness programs are incorporated into more companies, the opportunity for discrimination rises.

But, there’s always another side to the story.

Yay: The Argument for Wellness Programs

It’s obvious most wellness programs still have to work out the kinks, but if ran effectively, can benefit all involved. Just what kinds of benefits exist for those who start wellness programs?

  • Reduced healthcare spending: In a Harvard study, researchers found for every dollar spent on wellness programs, costs fell about $3.27, and for every absent day not taken, the company gains $2.73.
  • More productive workforce:  Absent employees mean work isn’t being done, and employees who are present but sick still aren’t as productive. This results in an estimated $2 trillion of economic activity each year. Healthy employees don’t take as many sick days, and tend to stay with companies offering wellness programs.
  • Increased company morale: Setting up a company gym, like one implemented by the Oncology Nursing Society in Pittsburg, Penn., can raise people’s confidence and inject a sense of camaraderie among workers. Developing a culture of wellness can permeate throughout companies.

Although some benefits of a wellness program are to place within the realm of statistics, sometimes it’s hard to measure the best outcomes.

Wellness Programs Go To Court

When Bradley Seff’s employer, Florida’s Broward County, told him that if he didn’t participate in their wellness program that he would be paying $40 a month, Seff took them to court, claiming the charges violated the ADA’s “prohibition against non-job related medical examinations and inquiries” — exactly what some opponents are worried about. The wellness program included four components:

  1. A biometric screening
  2. Disease management
  3. Online health risk assessment
  4. $20 bi-weekly charge for employees participating in health plans but not wellness programs

Although the ADA protects employees participating in voluntary programs, Seff’s program was in fact, mandatory because it was part of a contractual agreement between Broward County and the health insurance company. The court sided with Broward County, but it raises the question of just how voluntary some programs may be.

The Law & Wellness Programs

Wellness programs have been part of business-employee relations long before the ACA was implemented, and are subject to current laws. If wellness programs aren’t connected to a health plan, employers have more flexibility on the incentive types and penalties they’ll offer. However, if it’s in conjunction with a health plan, as it was in Bradley Seff’s workplace, a wellness program is subject to federal laws.

For example, the Health Insurance Portability and Accountability Act (HIPPA) of 1996, normally prohibits employers from discriminating against employees with different health portfolios, but makes an exception when it comes time to reward employees with financial incentives for reaching health goals. Some worry this could lead to a slippery slope of penalties as well, although the Treasury Department and Department of Labor are now considering certain consumer protections to fight this issue.

States have an important role in the guidance of wellness program and the protection of those who choose to participate. Penalty driven programs aren’t proven to result in better employee health and can be a breeding ground for discrimination. Consumer protection established at a federal level will only set minimum recommendations. States should start examining wellness programs and establish an acceptable level of protection for employees.

A Fresh Start: Starting a Wellness Program

While the benefits of starting a wellness program can be great, the risk of starting a program depends on the nature of your business. Traditionally, large companies were the biggest purveyors of wellness programs because they offered group insurance plan. The idea is that healthier employees will have less healthcare costs, saving the company big money. But, in today’s world, even small businesses, like Buffalo Supply, are taking measures to ensure employee’s health, even if they can’t offer health insurance.

If you’re a business owner thinking about offering wellness programs, the Young Entrepreneur Council recommends following four steps: four steps.

1. Determine the needs of the employer and employee: You can’t expect to have a successful program if you don’t know what the focus should be. Review company goals and employee expectations and find a way to affordably create a program meeting both.

2. Analyze data and create a plan: Are you finding that the majority of your employees want to lose weight? Try offering free fitness classes or starting a company gym. Maybe you run a high energy company and employees are stressed? Free bi-monthly massages or weekly yoga classes might be better. Remember, voluntary programs grant more options for incentives and activities.

3. Communicate: Running a wellness program isn’t just about finishing a 5k and earning $50. It’s about helping employees create positive, lasting changes. Wellness programs must be reinforced to create a culture of change. Changing “Pizza Fridays” to “Make Your Own Salad Fridays” might help too.

4. Incorporate incentives: In addition to communication, offering new incentives and creating new challenges will keep employees keen to participate.

But where do you find a wellness program? If you offer health insurance, ask your provider about starting a wellness program. They may already have one in place that can be set up and tailored to your needs. Always ask whether participation is contingent upon health insurance benefits.

You can also go through third party vendors. Many come with set up experts as well as in house nutritionist, fitness experts, and a bevy of other accessible resources. This may be  costly, but getting healthy doesn’t have to be expensive. Small businesses especially shouldn’t’ be discouraged from trying to offer employees a wellness program. Even small steps like giving employees fast food facts can begin shifting attitudes.

How the ACA Affects Wellness Programs

As if the layers of wellness programs weren’t enough, another one was added.

Building on existing policies, the ACA takes steps to protect consumers while also expanding incentives that can be offered. While the ACA still supports voluntary wellness programs, better protection is aimed at “health contingent wellness programs” which make participants meet goals related to their individual health status. These programs must:

  • Be reasonably designed to promote health or prevent disease: If you can’t meet the standard set forth by the program, you must be given alternative means to improve your health without it being burdensome.
  • Be reasonably designed to be available to all similarly situated individuals: If your doctor doesn’t recommend you meet the standard enforced by the program, you must be offered a different way to qualify for the reward.
  • Notify individuals of the opportunity to qualify for the same reward through other means: Employees must realize there’s another opportunity to gain a reward and how to request a change of means.

Another positive change the ACA incorporates is raising the maximum reward from 20% to 30% of the cost of healthcare. If a program aims to cut or prevent smoking, the maximum reward raises to 50%.

Be Well & Prosper – Anticipating the Future of Wellness Programs

But what lies in the cards for wellness programs as more studies emerge on effectiveness?

Shawn Connors, of Hope Health in Kalamazoo, believes we need to take a community based approach instead of focusing on one business. His company works with other companies implementing wellness programs, uncovering frightening revelations. Recently, in a Hope Health white paper, he laid out his concerns as well as his positive insights regarding the future of wellness programs. Problems he mentions include commoditization and a focus on incentives. Companies use formulaic approaches to a very individual problem, therefore, results aren’t always spectacular. Queue the opponents of wellness programs.

But Connors has recommendations on how to not only improve wellness programs, but also on improving community health. Changing the definition of wellness is the first step. For a long time, being well meant physically healthy. Today, it’s acceptable to include mental and emotional health into the mix. Connors wants to take it one step further and “talk much more about living to our full potential.”

Health shouldn’t be a business strategy, he advises. Instead, it’s vital to get the community involved: Your business working with hospitals; Hospitals working with non-profit organizations. Through these means, establishing a culture of wellness reaches more people than those in one building. Connors realizes this is a lot to accomplish, but just like the ACA and many other things in life, he says the process will evolve and take time to perfect – or not, depending on whose side you’re on.

“We don’t have a step-by-step guide yet for implementing a new way to wellness. But, it’s clear that as a wellness community, we’re at a clear crossroads, and about to move to a new stage.”

Follow Desiree on Twitter @DesireeBaughman.

 

 

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