Currently, 62% of employers offer some type of wellness plan, whether that is as simple as discounts on gym memberships or as comprehensive as a multi-faceted points-based program. Regardless, an employer must view a wellness program as investment in the employees, not in the health insurance plan itself.
1. How does an employer decide whether it makes financial sense to implement a wellness program?
Factors such as demographic makeup, company culture, and the overall wellness implementation strategy including structure and design, will determine the ultimate “return on investment.” Employers should expect to pay between $4-$15 per employee per month on a wellness plan Companies with high turnover or lower paid workforces tend to directly benefit the employer the least; however, as more and more companies adopt wellness initiatives, the less that this will hold true.
First, the employer must be willing to adopt a top-down approach to implementing the wellness program and be willing to make a push to change to the company culture with an emphasis on healthy living. Leaders determine culture. If caring for yourself and others is part of what the employer values personally, it only makes sense to include wellness as part of company culture as well.
Secondly, an employer must understand the goal of the wellness plan before you can expect to see any results. “Bad” behavior drives risk; risk drives illness and disease; diseases drive healthcare costs. The only way to change the course of this cycle is to change behavior. An employer should not expect to see a dramatic change in the first couple of years. The only real way to measure success is in risk factor reduction.
2. How does an employer maximize participation in a wellness program?
An employer must begin in the data collection phase of a wellness plan to experience long-term success. It is here where an employer identifies the current risk within the company by examining a multitude of data sets including clinical data obtained through claims or self-reported lifestyle data, health risk assessments (HRA), and biometric data. From here, an employer can determine the most critical areas to impact as the plan is designed.
Employers must then effectively market and communicate the wellness plan to employees AND families when integrating wellness plans. Often, the dependents are the more costly members of the employer’s health plan. Make the communication material as positive and personal as possible. It is vital that support from the executive team is evident in this communication and marketing. Employees follow what is done, not said.
Offering incentives will maximize participation.
Some employers feel that mandating certain requirements to maintain health care eligibility is the most effective way to force the hand in wellness participation. Others feel that offering voluntary incentive based plans is the safer path if you are trying to avoid discrimination liability and hope to boost employee morale as well.
The most effective plans include a variety and combination of incentives that will appeal to a broad employee base. The most effective incentives are those that are tied to the health plan, such as premium discounts and contribution to flexible spending accounts or health savings accounts associated with high-deductible plans. It is also important that the employee be able to measure their wellness success and milestones. This can be achieved through point based systems as well as effective web tools to evaluate progress.
It is important, however, not to discriminate when implementing certain incentives. To date, the only real measure is placed upon insurance premium reduction. An employer cannot incent in excess of a 20% cost reduction for participation in the wellness program.
3. What does the future hold for Wellness programs?
If you understand the fundamentals of what is behind the rising cost of healthcare, one can only speculate that government will begin to highly incent employers via hefty tax credits to enforce employer sponsored wellness plans.
In fact, 16% of gross domestic product is spent within the healthcare sector. This number is rapidly rising and in part is due to the declining health in the US. The only way for this number to stabilize is to change the behavior of the American people at large.
The largest portion, over 60%, of Americans are insured under employer health plans. Similar to other benefits, such as retirement plans, it seems logical that the government will intervene and place the wellness burden in the laps of employers of America to enforce these much needed programs.