The Organizational Benefits of Employee Wellness Programs

Even the best and most innovative organizations are experiencing the impact worker well-being on their organizations’ performance.  The bad news is that many of these organizations are unaware of the extent to which less-than-optimal staff member health and well-being is impacting workforce capacity and performance.  The goods news is that there is an increasing body of research and practice than can help organizations mitigate this frequently unseen issue and create significant opportunities for enhanced workforce attraction, retention and performance!  This article focuses on how businessal leaders can increase physical and financial staff member wellness in the worksite.

The Problems of Chronic Disease

According to the World Health Organization (WHO), 60% of deaths in 2005 could be attributed to chronic disease (cardiovascular disease, cancer, chronic respiratory diseases, and diabetes).1  The largest attributing factors to the chronic diseases include tobacco use, physical activity, and diet.2  The costs of these diseases are staggering.  For example, if there were a 10% reduction in mortality from heart disease and cancer, it could save the US $10.4 trillion each year.3  Further the WHO projects that over 80% of the US population will be either considered overweight or obese by the year 2015.

The Problems of Financial Distress and Dissatisfaction

As hard as it may be to fathom, a 2004 study found that 67% of U.S. Workers are dealing with Personal Financial Issues.4 In another study, it was found that these issues can exist in all segments of any workforce, regardless of income, education, or position level.5 Couple these facts with our workforce reality:

* The workforce is aging and demand for professionals in many industries continues to exceed the supply – and will for the foreseeable future.
* Due to the shortages of quality personnel the stress on our current workforce is increasing.
* With these workforce shortages, most organizations cannot continue to pay spiraling market prices for professionals.
* Lastly, those personality attributes that make many professionals great caregivers or service-providers also tend to make them less apt to focus on matters of personal financial management.

The Return On Investment

There are significant reasons why organizations should employ Procedures to begin Employee Wellness Programs for their staff members:

* Increase Productivity including reductions in medical care and workers compensation claims, absenteeism, and presenteesism;
* Reduce employer paid medical care and re-insurance premiums; and
* Increase staff member, physicians and patient satisfaction; and
* Increase staff member retention and productivity.

A recently published Towers Perrin case study6 found that a ten percentage point improvement on staff member engagement was linked to a 4.6 percentage point improvement on customer satisfaction and revenue growth and labor cost improvements equal to a 2.8% impact on controllable margin.

What all this shows is that providing Employee Wellness Programs and incentives and rewards is more than just “the right thing to do.”  Rather, there is a profound business case.  As workforce capacity and engagement increase, a bottom-up cultural change takes place in your business.  These changes drive improvements in customer satisfaction, productivity, absenteeism, and presenteesism – all of which drive improvements in profitability.

The Course of Change

As an employer, you can have a tremendous impact on the health of the community.  Here are a few suggestions on how you can engage your staff members (possibly include flowchart):

1. Define the Plan – Determine if you have the internal resource availability and knowledge to develop a formal Employee Wellness Program.  Many organizations, due to confidentiality legal and other reasons, pick to engage outside people to manage these processes.
2. Communication – Once you have developed the plan, communicate the plan to all staff members – using multiple media and approaches.
3. Lead by Example –Begin Employee Wellness Programs at the top (walk the walk).  Give yourselves the opportunity to go through a health risk assessment and a financial assessment.  If you can, communicate your results and your action steps to staff.
4. Develop incentives and rewards for Staff Participation – Here are a couple of financial incentives and rewards you can provide staff that are low cost and optimally have a return on investment:

1. Pay staff members to take a risk assessment
2. Lower employee contributions to medical plan for those with reduced risk of chronic disease and correspondingly raise employee contribution to medical plan for those with increased risk of chronic disease

5. Provide Personal Risk Assessment Counseling – Provide resources that can meet one on one with each staff member to understand their health risks and opportunities
6. Eliminate Trans-Fat from Your Dietary Offerings – If you have workplace food facilities, and haven’t been mandated by legislative statute, you should eliminate trans-fatty oils from the staff member and customer meals
7. Eliminate all Smoking Areas for Employees – More and more organizations, including large cities, are now banning tobacco use on their facilities.
8. Provide Proper Monitoring Programs – Probably the hardest part of the plan, the ongoing monitoring is critical.  Some organizations are large enough to own or build wellness centers – but even then, many staff members feel uncomfortable in using them.  Typically the users of wellness centers are those least in need.  The good news is that there are many external and online tools and options that are available today.
9. Encourage Other Local Businesses to Provide Employee Wellness Programs.  In some cases (e.g. hospitals), there are options where this can even generate revenue and/or deepen relationships with the communities you serve.

Legal Concerns

When thinking about a Employee Wellness Program, one must take into account certain requirements under ERISA, the Internal Revenue Code (Code) and the Public Health Service Act (PHSA). All three laws were amended by the Health Insurance Portability and Accountability Act of 1996 (HIPAA) to provide for enhanced portability and continuity of health coverage. HIPAA also added Code section 9802, ERISA section 702 and PHSA section 2702, each of which prohibits discrimination in health coverage based on health status.

To be a bona fide Employee Wellness Program, the plan must meet the following requirements:

* An individual’s total incentive must be limited. A limit of 10 percent to 20 percent of the total cost of employee-only coverage may be appropriate, according to the DOL.
* The program must be reasonably designed to promote good health or prevent disease.
* The incentive must be available to all similarly situated individuals. The program must allow any individual for whom it is unreasonably difficult because of a medical condition to meet the Employer Wellness Program standard (or for whom it is medically inadvisable to attempt to meet the Employer Wellness Program standard) an opportunity to meet a reasonable alternative standard.

1 2005 Preventing chronic disease:  A important investment. World Health Organization
2 2007 Working Towards Wellness:  Accelerating the prevention of chronic disease.  World Economic Forum
3 2007 The Value of Health and Longevity.  Kevin M. Murphy and Robert H. Topal, University of Chicago
4 2004 Employer/Employee Equation Research on Worker Types, Preferences and Engagement Issues – Concours Group, Age Wave and Harris Poll
5 1997 Neal E. Cutler, Ph.D
6 2003 Talent Report: New Realities in Today’s Workforce – Towers Perrin