Posts from — July 2010

Quitting tobacco use at any age can improve a person’s health. and believe it or not, older employees often fair better with tobacco use cessation than younger staff members.  

As reported by the Journal of American Medicine, Duke Univ. reseearchers tracked 573 older patients over 10 years. They found that just 16% of those who joined the smoking cessation program later returned to smoking.  

Previous research has found young smokers who attempt to quit have a 35% to 45% relapse rate within two years.

Given that employees nationwide are retiring later and the cost of retiree health care is sky high, you could want to keep trying with smoking cessation programs, even for the oldest employees on your health plan.

In this recession economy and out-of-control worker debt, many corporations who don’t have automatic 401(k) enrollment have seen participation drop.

Here’s how one small business in Arizona cleverly tied 401(k) education to employees’ other financial concerns. Rather than simply holding its usual 401(k) open enrollment education meeting, it held a “financial wellness fair.”

Stressed 401(k) importance

How it worked –  on the same day the company’s 401(k) provider sent a plan rep to discuss the retirement plan, the company also arranged for a qualified financial planner to speak to staff members.

The financial planner went first. She began the session by pointing out that she wasn’t affiliated by any method with the management of the 401(k) plan.

That was vital both for the company’s legal protection under ERISA and for building trust with staff members. She then discussed why it’s vital for individuals  to participate in the 401(k) plan, and offered attendees budgeting tips and basic strategies for cutting their debt.

The financial planner’s talk cut to the heart of several major issues that hurt both staff member salary satisfaction and 401(k) participation. Numerous studies show that the No. 1 reason many individuals  avoid 401(k) participation is that they feel they can’t sacrifice any part of their entire paycheck and still survive financially.

The second part of the session was the standard 401(k) enrollment presentation from the vendor. End result –  Staff Members were more attentive and there was a noticeable uptick in both new 401(k) enrollments and salary contributions from already-enrolled workers.

The event was such a smash that the business plans to make the Financial Wellness Fair a regular part of 401(k) enrollment. While the financial planning advice is generic (the business may add third-party personal finance planning as a voluntary benefit in the future), it’s also timely.

The 401(k) signup appeal comes while the financial planning tips are still fresh in employees’ minds and they’re aroused to do something to help themselves.

Looking for incentives to get overweight workers to buy 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% 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 Prevent Obesity Alliance found that many individuals  would gladly chip in for the cost of the program if they believed it would help them lose weight. What staff members want –

• confidential support and counseling

• access to a expert nutritionist or personal trainer, and

• onsite exercise plans.

Until recently, only large businesses 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 workers. Typically, workers pay up to about 25% of the cost. But some plans are fully employee paid.

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

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

A small, but quickly growing number of corporations 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-tobacco use staff members and those who commit to maintaining a healthy weight receive financial incentives that lower their share of monthly insurance premiums.

Level two –  the employer 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 business docks pay or fires staff members who fail to control their lifestyle-related health risks. Example –  A company called Clarian Health has sent notifications to staff members that beginning 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 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 in terms of HIPAAs non-discrimination rules. It is legal to reward staff members 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. Similarly, when an worker fails repeated tries to quit tobacco use, you’re still legally obligated to give them another shot next year.

Also 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. Employers 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 vital to –

1. Know thine enemy You’ve 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 business 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 worker education.

4. Integrate wellness with other benefits. Real-life experience has shown that you ought to consider your employee 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. When senior 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 significant betterment 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

Many firms require workers to work with an individual health coach to 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.

People  get off to a great begin – 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 workers 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 individuals  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 expert nutritionist.

Just 11% of organizations – 18%  of big employers 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 typically pay for themselves.

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

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

3. Assertive smoking cessation

A small, but rapidly 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 business installs a wellness program in which non-tobacco use workers 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 company docks pay or fires staff members 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, individuals  who smoke or chew tobacco would start be charged $5 per paycheck.

Are these strategies legal? at level one, the answer is a certified 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 employees who quit smoking but illegal to punish those who try and fail. If an worker tries but fails to quit smoking, you’re still legally obligated to give them another shot next year.

Also keep in mindthat, by law, the size of the reward or penalty under your wellness program can’t exceed 20% of the sum cost of coverage.

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

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

For a lot of 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. Typically, companies 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 staff member per month. Within three years of launch, you ought to be seeing meaningful 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 many businesss, 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 healthcare 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 staff member.

You can roll the $5 per month cost directly into the employee’s monthly share of their health care 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 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 buy in and participate at the same rate – whether they’re budget neutral or the company absorbs the cost.

But when employees 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.

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

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

A few years ago, company 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 provider(s) who came on-site than the needs of the hosting business or their staff members. More recently, businesses have refined the planning of the events to serve namely to launch or promote a wellness program.

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

To be certain you and your employees get the most out of a health fair, it assists 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, staff members 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 professionals said the more newfangled events were more like “disease fairs” than “health fairs.” In other words, the tone was little too somber and staff members weren’t particularly tuned in because they weren’t enjoying themselves.

Wellness program advisor Dr. Ron Goetzel believes that the savviest firms strike a balance in their wellness 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, staff members still need an incentive to attend the fair and get the desired screenings, and to doing the fun stuff. Some real-life programs that’ve worked –

• a contest offering prizes to staff members who visit every station

• quizzes and prizes based on info from different providers’ 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 use of tobacco at any age can improve a person’s health.

But a Duke Univ. shows that the group you might think would be the least likely to quit – individuals  over the age of 50 –  might actually have the best odds for quitting through a tobacco use 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 try to quit have a 35 percent to 45 percent relapse rate within two years.

Bottom line –   Given the aging worker population and the cost of retiree health care, you might want to keep trying with smoking cessation education for your older staff members.

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 (EAP) to illustrate the importance of attacking medical costs cross a wide front.

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

But ultimately you want to be certain that your wellness provider works paired with your employee assistance program (EAP) provider.

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 provider, STD and LTD providers, rehab individuals , and/or illness managers. You want all them talking to – and sharing data with – each other. When they’re not, it’s costing you money.

In general, the employers who achieve the greatest cost savings through their wellness programs are the ones who overlap wellness with behavioral and occupational health issues.