Smart Benefits: Wellness Programs That Pay Off
Monday, October 03, 2011
But simply offering a wellness program doesn’t guarantee happier, healthier employees. Companies need to drive participation or they won’t get the results they want – and need.
Money talks, employees listen
Nationally, participation in worksite wellness programs runs between 30 and 60 percent. And lack of involvement is the number one reason wellness programs fail since at least 80% of employees eventually need to take part to make a difference.
To drive participation, employers are starting to get more sophisticated with incentives. Many companies now reward employees who take part in wellness with premium credits and, in some instances, Health Savings Account deposits. The key is to make the carrot enticing enough, and employers might get some help with this thanks to the Patient Protection and Affordable Care Act of 2010.
As part of healthcare reform, the law includes plans to expand wellness incentives. In 2014, employers will be allowed to offer up to a 30% differential for wellness participants -- putting hundreds of healthcare dollars back in consumers’ pockets each year.
While come critics claim it’s punitive to charge higher premiums for those who choose not to participate or hit certain benchmarks, it’s important to remember that all of these programs are all offered on a voluntary basis. And they’re legal.
The Health Insurance Portability and Accountability Act of 1996 (HIPAA), which protects the privacy of employee healthcare information, allows employers to establish premium discounts for employees who participate in health promotion programs or achieve certain health targets. Employers just must be sure to comply with five requirements for standards-based programs:
- The program incentive cannot exceed 20% of the cost of the employee-only coverage under the plan
- The program must be “reasonably designed” to promote health or prevent disease
- The program must give the employees the opportunity to qualify for the incentive at least once annually
- The incentive must be available to all employees, and a “reasonable alternative standard” must be available to any individual for whom it is unreasonably difficult to meet the standard due to a medical condition or for whom is medically inadvisable to attempt to meet the standard
- The plan must disclose in writing to employees that a reasonable alternative is available
Three RI employers “Work Well”
Preservation Society of Newport County (Newport Mansions)
In 2006, the Preservation Society of Newport County (PSNC), known best for protecting Newport’s famed mansions, established a wellness program at the same time they implemented Health Savings Accounts for their 75 covered full-time employees. But with mixed results and participation, the organization decided to redesign their program in 2009.
Now employees receive an HSA funding differential if they participate in wellness. To earn the reward, employees must take part in health assessments, biometric screenings, a menu of fitness and weight management offerings and online and onsite educational opportunities.
The results? Participation jumped from a low of 20% to between 65-68% for three straight years. Plus, health risks for cholesterol, glucose and weight continue to improve each year.
SEA CORP, a Middletown defense contractor with close to 400 employees, has already seen a 5% increase in participation at the start of the second year of its wellness program, with 67% of employees now taking part.
To engage employees, SEA CORP offers 5% in health premium savings for employees who participate in programs like health assessments, health screenings, telephonic health coaching and a self-service wellness portal complete with weight management tools, nutrition information and online education.
With a baseline understanding of the health needs of its workers, SEA CORP has also added onsite activities to better target their employees’ specific health needs. Like what? A multi-team weight loss competition, physical activity challenge and smoking cessation programs for those ready to quit. Plus all employees get access to a full-service fitness center..
In 2010, Lincoln-based display manufacturer PCL began offering Simply Engaged, an incentive-based wellness program offered by UnitedHealthcare. With the program, employees and their spouses who take health assessments and participate in either telephonic or online coaching programs can earn up to $350 in gift cards. But despite the incentives, participation lagged.
Why? Mainly due to language barriers. Most PCL employees speak Spanish but the wellness program was only communicated about and supported in English. To address the issue, PCL hired an HR professional who speaks Spanish and worked with UnitedHealthcare to secure bilingual collateral materials to support the program.
To further drive enrollment, the company now offers a premium differential for those who participate in all parts of the program. In less than a year, overall participation climbed to 85%, well above the industry average of 30 to 60 percent.
A top-down commitment
At each of these employers, senior management sets the expectation for participation and supports wellness through its corporate culture. They fund the programs, take part in activities alongside employees and work hard to establish wellness as a benefit at open enrollment and throughout the year. Most importantly, they’re always striving to refine the program to maximize its benefits, for both the company and its employees.
Wellness evolves at the pace the employees are willing to embrace it. Any good program takes time. And for employers and employees who are looking for ways to make healthcare more affordable, the time is right now.
Amy Gallagher has over 19 years of healthcare industry experience. As Vice President at Cornerstone Group, she advises large employers on long-term cost-containment strategies, consumer-driven solutions and results-driven wellness programs. Amy speaks regularly on a variety of healthcare-related topics, is a member of local organizations like the Rhode Island Business Group on Health, HRM-RI, SHRM, WELCOA, and the Rhode Island Business Healthcare Advisory Council, and participates in the Lieutenant Governor’s Health Benefits Exchange work group of the Health Care Reform Commission.
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