Help employees take control of their health and lower expenses

The toll that an unhealthy employee takes increases every year. Data from the 2014 employer survey “Purchasing Value in Healthcare” by the National Business Group on Health showed that, on average, each employee costs an employer $11,176 in a single year. This is an 8% increase from 2013.

The Centers for Disease Control (CDC) estimates that $3 of every $4 employers spend on health costs are used to treat chronic conditions such as obesity, hypertension, diabetes, asthma, and depression. A Gallup study suggests that these same conditions create workforce absenteeism, costing U.S. employers $153 billion annually of lost productivity. The same study says 86% of full-time workers are above normal weight or have at least one chronic health condition. Therefore, most of an employer’s health plan costs may be preventable with a strong wellness program.

Having a healthy workforce

An employee who is healthy, engaged, and productive is extremely valuable. However, many employment laws prohibit taking into account an employee’s health when making employment decisions — the ADA, FMLA, and portions of HIPAA to name a few. So what legal options does an employer have to promote a healthy workforce?

Some employers consider wellness and disease management programs essential to the success of their organizations. In particular, here are three components of a wellness program that can help create a workforce of healthy employees:

  1. Health risk assessments (HRAs). In a recent survey of our clients, 78% who have adopted a wellness program said they offer an HRA. These screenings are important for collecting baseline health risk data. The assessments screen for crucial health factors such as high blood pressure, obesity, cholesterol, glucose, and triglycerides. HRAs raise an employee’s awareness of potential health risks so they can take action to avoid costly medical expenses in the future. These savings benefit the employee and the employer.
  2. Incentives. Our client survey showed that 76% of employers with a wellness program offer employees incentives for improving their health. What is being incentivized?
    • 75% – health risk assessments
    • 62% – wellness challenges
    • 40% – activity point-based programs
    • 30% – wellness education/classes
    • 28% – tobacco/non-tobacco use

It’s generally accepted that without any incentives, companies can expect about 10% of the employee population to participate. With the proper incentives, participation rates as high as 85% or better have been achieved.

Keep in mind that the Health Insurance Portability and Accountability Act (HIPAA) wellness plan rules and the newly proposed rules by the Equal Employment Opportunity Commission (EEOC) contain numerous requirements for incentive-based wellness programs, including a limit on the amount of reward or penalty that can be imposed on plan participants.

  1. Promote preventive care. Your health plan is required to provide free preventive care benefits for members, spouses, and dependents, such as cancer screenings, pap smears, PSA tests, mammograms, annual physicals, and routine immunizations. These benefits do not cost employees anything and can help catch conditions early and prevent future costly claims.

Communication is key

Communicate all of the components of your wellness program and health plan to employees effectively so they take advantage of them. To do so, send age-appropriate reminders, provide vaccination sign-ups for employees, and bring in outside vendors to provide screenings on site. While communicating with employees, keep messages positive and constructive by reinforcing how preventive care will improve their health and help lower future medical bills.

With a solid strategy, employees’ health and morale will improve, and you will save on health care costs.

David Flotten is vice president, senior HR consultant at Associated Financial Group.

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