Health Wellness ProgramHealth and Wellness Programs and Wellness Program Consulting

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

No shocker here –  Smokers and obese staff 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 businesss are taking desperate measures to avoid the costs associated with these staff members.  The step can be broken down into three levels of aggressiveness and potential risk/reward.

Level one –  the employer installs a health promotion program in which non-smoking staff and those who commit to maintaining a healthy weight receive financial incentives that lower their share of monthly insurance premiums.

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

Level three –  the company docks pay or fires workers who fail to control their lifestyle-related health risks. Example –  A corporation called Clarian Health has sent notifications to workers that beginning 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 qualified yes. health insurance portability and accountability act (HIPAA)s non-discrimination rules permit such incentives under several conditions.

Wellness incentives walk a fine line for HIPAAs non-discrimination rules. It’s legal to reward workers 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. Likewise, if an employee fails repeated tries to quit use of tobacco, you’re still legally obligated to give them another shot next year.

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

The other two are still largely uncharted waters in the courts. Employers considering these policies should proceed with extreme caution. Remember 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, wellness programs require constant monitoring and periodic adjustments.  The wellness programs that get mediocre results are the ones that are left to run on autopilot. That’s why it’s crucial to –

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

2. Create realistic expectations. With wellness, what an company gets will nearly 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 employee 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 wellness 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 employee buy-in is for upper-level management to lead the health promotion program by establishing a positive example. If upper managers are unwilling to participate and address their own health issues, don’t expect many staff to take the health promotion program seriously.

Here’s more evidence that wellness programs pay for themselves –

Over the last two years, one company in five has seen significant betterment in employees’ health status – and started to stabilize their costs – as reported by one study.

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

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

1. Health coach outreach

Many firms require workforce to work with an individual wellness coach to get a discount on monthly premiums or earn cash incentives.

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

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

People  get off to a great start – and they’re enthusiastic about the incentive – 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 people  on the right track. Rather than requiring employees to contact the health Coach, a growing number of organizations require participants to take calls from the health Coach.

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

2. Nutritional education/therapy

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

Just 11 percent of businesses – 18 percent  of large companys and 7.5 percent of small to medium ones – have such wellness programs, according to SHRM’s most recent benefits survey.

Even fewer offer (via their EAPs) nutritional therapy for individuals  with eating disorders. But available data on these wellness programs shows they ordinarily pay for themselves.

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

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

3. Aggressive tobacco use cessation

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

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

Level one –  the company installs a health promotion program in which non-use of tobacco staff members and those who commit to maintaining a healthful weight receive financial incentives that lower their share of monthly premiums.

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

Level three –  the corporation 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 personnel 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 licensed yes. HIPAAs non-discrimination rules permit such incentives within limits.

In a nutshell, it’s legal to reward staff who quit smoking but illegal to punish those who attempt and fail. If an employee tries but fails to quit smoking, you’re still legally obligated to give them another shot next year.

Additionally keep in mindthat, by law, the size of the reward or penalty under your health promotion program can’t exceed 20% of the total cost of coverage.

At levels two and three, it remains to be seen if 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 you are able to use as a guideline. It’s useful whether you already have a wellness program or are thinking about starting one.

It normally takes at least 18 months from the launch of a wellness program to see any results in your health care plan bottom line.

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

By and large, the long-term cost savings from a wellness program are going to be driven by how much you’re willing to spend. Ordinarily, businesses get what they pay for – 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 ROI 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 wellness programs budget-neutral

For a lot of employers, the most effective way to manage the cost of a wellness 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 health care costs at the outset, nor lowers them. Example –  You plan to roll out a health promotion program effective Jan. 1.  The health promotion program will cost the business $5 per employee.

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 employees are used to seeing small increases in their monthly contributions each plan year.

Just make certain you’re not hitting folks with a big hike on top of that $5. Comparably designed health promotion programs pay off about the same – meaning workforce buy in and participate at the same rate – whether they’re budget neutral or the company absorbs the cost.

But when staff members get clobbered by large-scale contribution hikes at the outset, they often resist the health promotion program.  The long-term Return On Investment (ROI) for these health promotion programs is usually disappointing.

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

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

Several 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 vendor(s) who came onsite than the needs of the hosting corporation or their personnel. More lately, corporations have refined the planning of the events to serve in particular to launch or promote a health promotion program.

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

To be certain you and your employees get the most out of a health fair, it helps to be aware of 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, personnel 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 specialists said the more newfangled events were more like “disease fairs” than “health fairs.” In other words, the tone was little too somber and employees 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 health fairs. Stick with the screenings, but also feature exhibitors who offer “lighter,” more enjoyable services. Examples –

• A booth from a local health-food store

• A chair-massage station

• elder-care info from the AARP, or

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

Offering incentives

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

• A contest offering prizes to employees who visit every station

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

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

• cash incentives (as little as $20 and as much as $100) to people  who voluntarily participate in various screenings.

Medical research has long shown quitting smoking 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 – may actually have the best odds for quitting through a smoking cessation program.

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

Bottom line –   Given the aging employee population and the cost of retiree healthcare, you might want to keep trying with smoking cessation education for your older personnel.

The businesses with the most cost-efficient medical programs are the ones that streamline the services personnel receive for both their physical and psychological 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 employee assistance program to illustrate the importance of attacking medical costs cross a broad front.

You can begin a health promotion program with a health risk assessment and then, when appropriate, roll out a use of tobacco cessation program or a losing weight program.

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

Here’s why –  It’s very common for an employee to contact the EAP because the person feels depressed about his or her weight. What you want is for the EAP vendor to treat the employee’s depression and behavioral issues, plus you want the 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 disease 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 employers who achieve the greatest cost savings through their health promotion 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 wellness program in your budget.

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

1. Top-down wellness budget

Depending on the size of your company and wellness program, you might have full budget responsibility or might 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 wellness program within the limit. If that’s the case, here are three critical questions to ask –

• Does this limit include money set aside for worker incentives and future programs?

• Should we keep long-tenured health promotion programs that keep going up in price, and

• Does Benefits/HR have to deliver all education about the health promotion program, or is there additional funding to hire staff?

2.  Zero-based wellness budgeting

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

• Rank health promotion programs by priority (health-risk assessments must be at or near the top)

• Indicate which expenditures are fixed and which are variable, and

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

3. Estimating wellness Return On Investment

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

When not, it’s time to take a fresh look at the health promotion program design.

Given the gigantic growth of wellness programs over the last two years, it was inevitable resistance would creep up among watchdog groups.

In Washington, lobbyists have spearheaded a push for Congress, the DOL and IRS to crack down on “punitive” wellness programs.

Namely, the groups seek to limit health promotion programs in which employees’ share of their medical costs are directly tied to their willingness to participate in a health promotion program.

HIPAA’s non-discrimination rules prohibit corporations from creating negative financial incentives for workers with health risks.

For example, you can’t raise someone’s premium share because he or she smokes. What you are able to do is offer a discount when someone completes a smoking cessation program.

Reason –  the law does allow for financial incentives to staff members who willingly participate in wellness programs.

The watchdog groups seek greater regulation to be sure incentives and discounts are used only as rewards for healthy behavior, not as a thinly veiled form of discrimination against high-risk personnel.

A recent survey finds almost 42 percent of businesss with 200 or fewer personnel have some sort of disease management program.

That’s a huge increase from four years ago, when just 28% of smaller businesss offered such wellness programs.

There’s more to come, too. Fifteen percent of respondents that didn’t currently have a disease management (DM) component to their medical plan hope to add one by 2011.

The highest-demand disease management (DM) programs are for diabetes, asthma and heart disease.

Source –  Small Employer Benefits Survey, PDR Consulting Group, 9/1/2008.