Anderson Family Wellness

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

Roughly 35 percent of firms with wellness programs focus on providing employees with convenient access to weight loss resources.

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

• confidential support and counseling

• access to a specialist nutritionist or fitness trainer, and

• onsite exercise programs.

Until recently, only large companies were able offer such programs as part of their wellness benefits.   But the fastest growth of these 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 staff members. Ordinarily, staff members pay up to about 25% of the cost. But some plans are fully employee paid.

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

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

A small, but quickly growing number of employers are taking desperate measures to avoid the costs associated with these employees. the step can be broken down into three levels of aggressiveness and potential risk/reward.

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

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

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

Are these strategies legal? at level one, the answer is a certified yes. HIPAAs 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 employees for wellness participation but its illegal to punish those who fail to improve their health.

Example –  When an worker follows a weight-loss program in good faith but fails to lose weight, you can’t withhold the incentive. In like manner, if an worker fails repeated tries to quit tobacco use, 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 wellness program cant exceed 20 percent of the sum cost of coverage.

The other two are still largely uncharted waters in the courts. Businesss 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 programs apart from the rest.

At their core, wellness programs require constant monitoring and periodic adjustments. the 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 employees and their dependents.

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

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 ought to consider your staff member 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 management to lead the program by setting a positive example. If upper-level managers are unwilling to participate and address their own health issues, don’t expect many staff members to take the program seriously.

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

Over the last two years, one organization in five has seen meaningful improvement in employees’ health status – and began to stabilize their costs – according to one study.

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

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 health 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.

Individuals  get off to a excellent 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  individuals  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 worker obesity –  offering an worker nutrition-education program administered by a professional nutritionist.

Just 11% of organizations – 18%  of big businesss and 7.5% of small to medium ones – have such programs, according to SHRM’s most recent benefits survey.

Even fewer offer (via their EAPs) nutritional therapy for individuals  with consuming disorders. But available data on these programs shows they normally 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 healthful food options, giving out nutrition-linked gift cards and extending obesity-prevention incentives to people ‘s family members.

3. Aggressive tobacco use cessation

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

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

Level one –  the employer installs a wellness program in which non-smoking employees and those who commit to maintaining a healthful 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 employer docks pay or fires workers who fail to control their lifestyle-related health risks.

Example –  Clarian Health made news last fall for sending notice to staff members that as of Jan. 1,  2009, people  who smoke or chew tobacco would start 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 within limits.

In a nutshell, it’s legal to reward staff members who quit tobacco use but illegal to punish those who try and fail. If an staff member tries but fails to quit tobacco use, 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 wellness 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 (ROI). and wellness ROI is tougher to calculate than, say, a 401(k).

18-month guideline

Recent studies have established some benchmark data on wellness ROI you can use as a guideline. It’s useful whether you already have a wellness program or are thinking about starting one.

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

For many 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 wellness program will be driven by how much you’re willing to spend. Usually, businesses get what they pay for – both in time and money invested.

As a rule of thumb, the average cost to the employer is about $3 to $5 per participating employee per month. Within three years of launch, you must be seeing significant savings.

The typical ROI tends to be about $4 to $5 saved for every dollar spent. So how can you manage the costs in the short-term to 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 program neither adds to your health costs at the outset, nor decreases them. Example –  You plan to roll out a wellness program effective Jan. 1. the program will cost the corporation $5 per worker.

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 be sure you’re not hitting folks with a large hike on top of that $5. Comparably designed wellness programs pay off about the same – meaning workers purchase in and participate at the same rate – 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 ROI for these programs is often disappointing.

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

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

A few years ago, business wellness 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 business or their staff members. More lately, corporations have refined the planning of the events to serve especially to launch or promote a wellness program.

To be successful, the events need to serve two purposes –  improveing employee education and building their enthusiasm to participate in the wellness program.

To make 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, employees received easy-to-grasp information on key wellness topics such as disease detection, symptom control and smarter medication practices. They also receive important services like free blood-pressure screenings.

On the down side, some experts 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 in particular tuned in because they weren’t enjoying themselves.

Wellness 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, employees still need an incentive to attend the fair and get the desired screenings, also to doing the fun stuff. Some real-life programs that’ve worked –

• a contest offering prizes to workers 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 – individuals  over the age of 50 –  may 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 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 percent to 45 percent relapse rate within two years.

Bottom line –   Given the aging staff member population and the cost of retiree healthcare, you may want to keep attempting with smoking cessation education for your older employees.

The organizations with the most cost-efficient health plans are the ones that streamline the services staff members receive for both their physical and mental health.

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

Let’s look at the relationship between your wellness program and your employee assistance program to illustrate the importance of attacking medical costs cross a broad front.

You can begin a wellness program with a health risk (assessment|appraisal} and then, if appropriate, roll out a smoking cessation program or a weight loss program.

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

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

The same thing escorts the relationship your wellness program and your workers’ comp vendor, STD and LTD vendors, rehab individuals , 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 businesss who achieve the greatest cost savings through their wellness programs are the ones who overlap wellness with behavioral and occupational health issues.

Attempting 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 budget

Depending on the size of your organization and wellness program, you may have full budget responsibility or might need to work with a C-level who’s budgeting specialistise.

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. When that’s the case, here are three crucial questions to ask –

• Does this limit include money set aside for staff member incentives and future initiatives?

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

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

2.  Zero-based budgeting

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

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

• Indicate which expenses 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 ROI

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

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

Thinking about an obesity-related disease management program for your organization? Here’s what you need to know.

In order to be effective, the program must meet participants’ individual medical and psychological needs, not to mention your own organization’s need to control long-term health care costs.

How wide-reaching should the program be? After all, it doesn’t make sense to pay for services your staff members don’t want or can’t use.

Mary Beth Chalk of Resources for Living suggests that obesity programs may be broken down into four tiers of employee need, from which your organization’s return on investment (ROI) can also be measured.

Tier 1 –  Education

Tier I staff members struggle with weight control problems but don’t need a health coach.  Instead, they might benefit from a self-directed program that provides weight-management related materials online, targeted mailing, and/or access to nurse call line.

How to measure ROI –  utilization. Do workers click on the Web site? Do they return to the site regularly? Do individuals  use the nurse line? Your program provider should provide you detailed use stats.

Tier 2 –  Clinical supervision

If the staff member has been diagnosed as obese – a BMI  score over 30 is obese, over 35 is clinically obese – he or she would do better working with a health coach in a clinically supervised program.

Three keys to getting maximum results –

1. Periodically have participants rate their relationship with their health coaches. Not everyone clicks, so a change might  be in order.

2. Coordinate your disease management care with your staff member assistance program (EAP)services. Reason –  Inability to control weight is often closely tied with mental health issues – and one can adversely affect the other. the more closely your EAP and obesity program managers work together, the higher the chance for success.

3. Beware of the fade-out effect. Many staff members in weight-loss programs get off to a excellent start and then fall back into old habits. People  should re-commit to the program after three sessions, four months and nine months.

To measure ROI, look at utlization, goal achievement and reduced presenteeism. of course, presenteeism is notoriously challenging to measure with reliable dollar figures. So how can you overcome that problem?

• Start with employees’ salaries. Let’s suppose one participant earns $40,000 per year.

• Ask workers to self-report how energetic and productive they feel on the job, on a percentage scale. Then have supervisors estimate the employee’s productivity and split the difference. for this example, let’s assume it averaged to 50 percent.

• Collect scores again six months and one year into the program and then multiply the difference by salary. the result is your estimated productivity ROI.

In the example above, when the employee earning $40,000 improves from 50% to 75% after one year, the productivity related ROI is $10,000.  

Tier 3 –  Medical management

At this level, the obese worker needs a higher level of care than a health coach can offer. the worker has chronic health conditions related to obesity – like diabetes, high blood pressure, and/or sleep apnea – and needs a doctor case manager. Namely, the worker needs to set up regular visits with the doctor and create a treatment plan.

To measure ROI, start with the lower-tier criteria, then track quarterly and year differences in FMLA or compensated absences, and prescription drug costs. Then compare it to the per-participant cost of the obesity program.

Tier 4 –  Morbid obesity

At this level, the employee has been diagnosed as morbidly obese – Body Mass Index (BMI) over 40 – and is considered a potential candidate for gastric bypass surgery.

ROI is measured through ongoing health claims as well as the previous criteria.