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Benefits Business
Wellness programs yield more than cost savings
Employees recognize the value of these programs to their long-term health
By Len Strazewski
It’s about the health care costs, isn’t it? When employers launch wellness and health risk assessment programs, they hope to reduce their health insurance claims and reverse the long-term health care cost trends.
They also hope that employees will get the message that they need to take more responsibility for their lifestyles and medical services choices and join in the employer efforts, maybe reducing their personal costs in the process.
Wellness programs are also perfect companions for consumer-directed health plans (CDHPs) which provide tax-supported benefits to employees who reduce their health spending. Most employee benefits agents and brokers market the plans together and assist employers in communicating their value and purpose.
It’s a good message, but according to a new survey of employee attitudes, employees are getting a second message—and it may even be better than what the employers thought. Some employees recognize that wellness programs are probably helping their employers cut costs, but even more believe that the benefits are helping them live longer, live healthier and be more productive.
That may be an even better message that their agents and brokers can use to help clients promote participation.
According to the most recent Principal Financial Well-Being Index, a survey research report conducted by the Principal Financial Group in Des Moines, Iowa, about half of workers surveyed say they believe their employer’s wellness initiatives are successful in reducing health care costs. However, only about 30% participate in wellness programs to reduce their own health care costs.
But, they also see other benefits. About 47% say they participate in wellness programs to achieve better overall physical health, and 40% say the programs encourage them to work harder and perform better.
About 30% say wellness programs give them a greater chance of living longer and healthier lives and, also notable in these difficult economic times, 28% say they participate in wellness programs to reduce their stress.
“Wellness programs are clearly a win-win, especially at a time when employers and their employees are more budget conscious,” says Lee Dukes, president of Principal Wellness Company, a Principal Financial Group subsidiary.
“Employers benefit by retaining top talent, energizing their employees and reducing the number of sick days. Employees benefit from improved physical health, reduced stress in the workplace and the financial benefits of a healthy lifestyle.”
Jerry Ripperger, director of business development and a consumer health program director at Principal Financial, agrees. Wellness programs “work hand in glove with CDHPs,” and program participation is important to the success of benefit plan designs that target better health care utilization and cost control.
But Ripperger advises agents and brokers and their clients to use the positive employee perceptions to more effectively promote wellness programs, rather than focus exclusively on cost issues.
“Employees generally have no idea of the real cost of their health benefits since, in most cases, they pay only a small portion of the costs,” he explains. “But employers understand the costs all too well. For them, it’s all about return on investment and even though they may not immediately see lower costs as a result, they believe that health claims costs will go down.”
However, they may be missing other wellness benefits, such as reduced lost time, greater productivity and better morale. These should be compelling reasons to offer wellness benefits and provide valuable understanding in developing benefits communications.
Ripperger says the survey results indicate that wellness programs have unexpected strengths in the eyes of employees and employers should “play to your strengths. Employees believe that wellness programs will allow them to live longer and live healthier.
“That’s what I would lead with in developing my message in support of wellness program participation.”
And not just because the message may improve participation, Ripperger continues. “At the end of the day, don’t employers have a moral imperative to help their employees become healthier, become more productive and, in the end, happier?
“Employees realize that wellness makes them a better employee and more likely to stay with their employer. That’s an immense value.”
Employers could also do more to incent employees to program participation and shape benefits that are more appealing to employees and consistent with their positive perception. About half of survey respondents reported that their employers provide no incentives to participate in their wellness programs, and less than one quarter (22%) said they believed that management encouraged them to participate.
About 17% said their employers allowed flexible scheduling to allow for workday participation, 15% offered lower health insurance costs, but only 13% provided gift certificates and non-cash incentives and 12% offered cash incentives.
What do employees want that their management does not yet provide? Top desired benefits include access to fitness facilities (27%), fitness center discounts (23%) and weight management programs (19%).
This Principal Financial Well-Being Index survey was conducted online by Harris Interactive in October 2009 among 1,120 employees and 602 retirees of small to medium-sized employers with 10 to 1,000 employees. Principal began conducting the annual survey in 2000.
Employers also may be getting a double value from another benefit—employee assistance programs (EAP). Employee benefit industry surveys indicate that about half of employers are reporting increased use of EAPs since the beginning of the economic recession for an increasingly broad range of issues.
Sean Fogarty, senior vice president of CuraLinc Health care, a Chicago-based EAP and wellness services provider, predicts EAP use to continue to grow this year, driven by five key trends that link behavioral health care costs and productivity.
“I believe employers will look to integrate their EAP with other components of their health management strategy. When positioned correctly, an EAP can act as an effective vehicle for managing health care costs and enhancing productivity,” Fogarty says.
Specifically, Fogarty predicts that employers:
• Will use EAPs as a frontline technique to combat increasing health care costs driven by the Mental Health Parity and Addiction Equity Act. EAPs will be used to direct employees to the appropriate and probably the most economic care.
• Will integrate EAPs into pharmacy benefit management to better manage utilization of drug treatments for anxiety, depression and drug dependency which have become increasingly expensive and increasingly utilized.
• Will expect EAPs to take a more active role working with employees filing disability claims, to improve return-to-work rates and improve productivity.
• Will connect their EAPs more completely to other health management and wellness initiatives and emphasize communication of their value. “EAPs play a major role in reducing health care expenses and could provide even more benefits if their services were better known and understood,” he says.
• Will be more proactive in trying to overcome any stigma surrounding the use of EAPs.
The message is clear for agents and brokers who advise employers about their benefits plans. Wellness benefits will work only if employees participate, and those employees are most likely to participate if employers shape a clear message.
The author
Len Strazewski has been covering employee benefits issues for more than 30 years and is employee benefits columnist at Human Resource Executive magazine.
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