How wellness programs can impact workers’ compensation costs and how new grants can help Featured

7:02pm EDT February 29, 2012
How wellness programs can impact workers’ compensation costs and how new grants can help

Employers today are experiencing escalating health care costs associated with the significant increase in health risk factors, such as obesity, chronic disease and an aging work force. The impact these conditions and others have on workers’ compensation costs is generally left out of the equation. Studies have shown that workplace wellness programs have the ability to generate a significant reduction in return-to-work days, frequency and severity of claims, as well as presenteeism or absenteeism and the cost of health care benefits. Depending on accepted metrics, the return on investment (ROI) for employers can reach $6.50 for each dollar of investment.

“Implementing workplace wellness programs not only can improve the health and well-being of Ohio’s employees, but also impacts one of the largest operational expenses for an employer, workers’ compensation premium. With grant monies now available from the Ohio Bureau of Workers’ Compensation (BWC), even small employers have the ability to access resources that usually only the larger employer can afford,” says Randy Jones, senior vice president, TPA Operations for CompManagement, Inc. Smart Business spoke with Jones about the monies that are now available for your business in Ohio.

Why did the BWC start this grant initiative?

To meet the challenges of obesity, rising incidence of chronic diseases, and the aging work force, BWC recently established a Workplace Wellness grant. The objectives are to limit and control the escalating cost of workers’ compensation claims through addressing these health risk factors as well as to reduce health care costs for employers and improve the health of Ohio’s work force.

In 2010, 25 to 29 percent of Ohio’s adult population was considered obese (body mass index equal to or greater than 30) and the largest percent of our work force was between the ages of 45 to 54. Research has shown these challenges contribute to increased incidence and cost of workplace accidents and illnesses.

Who is eligible to receive a grant?

All employers (public and private) participating in the state-funded workers’ compensation program are eligible for the grant. Self-insured employers are not eligible. The employer may not currently have a wellness program in place, which consists of a tool that measures health risk factors plus programs that are designed to address those factors. If an employer does not have a tool or a program or lacks both, they will qualify for grant funding. If however, the employer uses a tool and designs programs based on the results from the tool, the employer will not qualify at this time. As an example, if an employer currently offers a Health Risk Assessment (HRA) but does not create any programs from the results of the HRAs, the employer would be eligible for a grant.

How much money is available under the Workplace Wellness grant initiative?

BWC has allocated $4 million for the Workplace Wellness grants over a four-year period. Grants are available to employers up to $15,000 over four years, which will allow for up to 50 employee participants per employer and $300 per participating employee. The amount per employee is graduated each year as BWC takes employee participation into consideration when awarding and renewing the grant. These funds are intended to supplement the cost of a wellness program, not fully fund it.

How does the application work?

Applications are received and reviewed by BWC on a first come, first served basis. The application form is available on their website at www.ohiobwc.com/employer/programs/safety/WellnessGrants.asp. The major components of the application include a profile of your organization, an estimated budget for the workplace wellness plan, selection of a workplace wellness vendor, and a timeline for implementation of your program. A safety management self-assessment is also required.

What are the requirements for participation?

An employer must contract with a third party vendor that provides wellness program services in order to participate and submit an application to BWC. In addition, the employer must complete an online safety self-assessment, submit baseline data such as HRAs, biometrics, and a program plan within three months of receiving the grant funding, provide receipt documents, and submit an annual case study that explains what has been accomplished in creating and implementing a program as well as a plan for the upcoming year. Data elements pertaining to health risk factors such as cholesterol, blood pressure, etc. must also be reported annually in an aggregate format for all participating employees.

Why should my organization apply for this grant and implement a wellness program?

While workplace wellness programs help to reduce health risks, improve quality of life, and enhance personal effectiveness for your employees, studies show these programs also help to reduce workers’ compensation and disability costs for an employer by an average of 30 percent. This initiative is best suited for employers with measurable claims experience, a strong interest and desire to implement workplace safety and wellness programs, and a willingness to participate for four years.

How can my Third Party Administrator for workers’ compensation help with the process?

TPAs that provide safety services to their clients are well-suited to assist with this implementation. They will be able to develop occupational risk assessment tools as well as analyze data of health risk factors that contribute to the length and severity of incurred workers’ compensation claims. By linking safety and occupational health programs such as wellness together, an employer should see an overall reduction of workers’ compensation costs with enhanced employee morale and improved productivity.

Randy Jones is the senior vice president of TPA Operations for CompManagement, Inc. Reach him at (800) 825-6755, ext 2466 or Randy.Jones@sedgwickcms.com.