How to reduce employee benefit costs with a strategy for improved health Featured

9:18pm EDT January 31, 2013
How to reduce employee benefit costs with a strategy for improved health

According to The World Health Organization, the United States spends more annually on health care than any other country in the world. Many health problems are a direct result of smoking, lack of exercise, poor diet, excess stress and other unhealthy lifestyle choices.

An unhealthy employee costs U.S. employers an average of $670 per year and obesity accounts for about $400 of those costs, according to the Society of Human Resource Management.

“Through workplace wellness programs, an employer can raise awareness on leading health issues and offer options to help impact the overall health of their employees,” says Renay Gontis, communications coordinator at JRGAdvisors, the management arm of ChamberChoice.

Smart Business spoke with Gontis about how to create a workplace wellness program to lower health benefit costs over time.

What is a workplace wellness program?

Workplace wellness programs are made up of long-term strategies and activities geared toward reducing benefit costs through improved employee health. Wellness programs may include education classes, onsite health screenings, subsidized use of fitness facilities, healthier options in vending machines, and internal policies designed to promote and encourage healthier behavior.

Individual employee health is directly tied to employee morale, absenteeism and productivity — healthier employees are less likely to miss work, be more productive during the day and be happier overall. Improved employee health can also reduce health plan utilization, which will, in turn, lower health benefit costs over time and improve a company’s bottom line.

What are common wellness initiatives?

Common initiatives include onsite flu shots, general health and safety communications for employees, weight management programs, smoking cessation, health fairs, health risk assessments and walking programs. Learn about your employees to develop a program based on their goals, risks and needs. In addition, employers are offering incentives, as well as connecting participation to the medical premium cost.

How will the Patient Protection and Affordable Care Act (PPACA) impact health insurance and employee wellness decisions?

PPACA includes enhanced wellness incentives through health insurance plan designs that reward targeted wellness participation and the attainment of specific improvement in health outcomes.

How does PPACA encourage wellness incentives into health plan design?

Specifically, proposed regulations provide for increases in the maximum reward or penalty from 20 to 30 percent of the total cost of employee coverage and increase the reward or penalty from 30 to 50 percent for tobacco cessation programs in 2014.

How do you create a wellness program?

To develop a successful program:

  • Gain upper management support.  Management must understand the benefits for employees and the organization, and be willing to put funds toward development, implementation and evaluation.

  • Create a wellness team. The team — made up of all levels of employees — will be responsible for developing, implementing and evaluating the results of the program.

  • Tailor initiatives to employee needs. Gather data through internal focus groups or surveys to help assess your employees’ health interests and risks.

  • Establish an annual plan. An annual operating plan should include a mission statement for the program, along with measurable short- and long-term goals.

  • Create a supportive environment. It is important to provide ongoing encouragement, support, opportunities and rewards to keep employees engaged.

  • Consistently evaluate outcomes. Throughout the program, especially at the end, review whether goals and objectives have been achieved. It’s important to adjust as needed to achieve the most favorable outcome for the employee and company.

If an employer is interested in starting a wellness program, contact your adviser and insurance company for ideas on cost-effective wellness programs. Most insurance companies offer their own programs, which can be used individually or in conjunction with your company’s customized program.

Renay Gontis is the communications coordinator at JRGAdvisors, the management arm of ChamberChoice. Reach her at (412) 456-7000 or renay.gontis@jrgadvisors.net.

Click here for more resources about workplace wellness.

Insights Employee Benefits is brought to you by ChamberChoice