Current Health and Wellness Plan Trends

Wednesday, January 06, 2010

If an organization invests in employee health and wellness, they may expect fewer claims or at least lower claims, and the organization may expect a reduction in their overall health care cost. Healthier employees are more productive, use fewer sick days, and manage work related stress better than unhealthy employees1. However, if the employee is doing all of the right things to get and stay healthy, yet their enrolled spouse and/or dependents are not, organizations can expect to see little return on their investment2. The investment in employee health and wellness must also extend to the employee’s family for the program to be effective3.

The role of spouses cannot be ignored; if spouses cannot influence or change employees’ health behavior, how can employers? Spouses and dependents are integral to the overall control of health care costs2. Organizations such as the University of Alaska recognize the role of spouses by offering spouses a $100 incentive to complete a Health Risk Assessment3. Blue Cross Blue Shield of North Dakota’s Health Club Credit program allocates members and spouses $20 monthly for health club participation, if they exercise at least 12 days a month4. Marvin Windows encourages participation in its wellness program by reducing employee health care premiums up to $50 per month for family participation in the program5. To further encourage participation in fitness activities, Marvin reimburses 50% of the cost for Health/Fitness Club memberships and weight-loss programs for employees and spouses6.

Do organizations with health and wellness programs achieve acceptable levels of Return on Investment (ROI)? In a 2009 Healthcare Finance News survey of 372 US employers covering 1.8 million employees, 2/3’s of the respondents who offer employee health and wellness programs report a positive ROI7. In its 2006-2007 latest wellness survey, the Business Roundtable reported ROI ratios ranging from the low 2’s to the high 7’s for member organizations comprising 10 million plus employees with annual revenues of $4.5 trillion8.

As the economy begins to improve, many organizations are beginning to develop strategies for retaining their current human capital in the face of increased competition. Employee health and wellness programs are cited as one tool in the organization’s toolbox to achieve the goal of retention9. The reach of health and wellness programs extends into the external community as well. Johnson & Johnson feels so strongly about employee health and wellness that after establishing its own employee plan, it purchased two businesses to market similar programs to other employers10.

While ROI ratios from the low 2’s to the high 7’s may seem impressive, those ratios are only achieved with significant investment in program design and communications. The University of Alaska’s wellness program includes web based communications as well as print and video materials sent to the employee’s home3. A strong communications plan is essential to the success of any employee program, much more so for health and wellness programs. With the workforce becoming increasingly more diverse and more multi lingual, communication planners must think multi dimensionally11. John Deere provides employees with communications materials sent to homes, provided during at-work meetings, and a fully branded “one spot” website with information on company benefits and available wellness resources. The website even includes employee health and wellness “success stories”12.

If employees are not enrolled in the programs, do not participate, or make no effort to change their unhealthy behavior, there will be little or no ROI. One aspect of program design indicates that financial incentives may be key in reaching the desired employee engagement levels. Michael F. Carter, Vice President of Hay Group, reports that “incentives provide a ‘win-win’ for employees and employers” Carter reports that cash is a common incentive, however, he also suggests that gift certificates, time off, and reduced medical premiums work well.13. As evidenced by the experience of the University of Alaska, Blue Cross Blue Shield of North Dakota, and Marvin Windows some employers perceive that financial incentives encourage participation in wellness programs.

1. Bad Economy, Good Health, BusinessWeek, Corporate Executive Board July 24, 2009,
http://www.businessweek.com/managing/content/jul2009/ca20090724_788405.htm

2. The Obvious Secrets to Reducing Your Healthcare Costs, White paper, Corporate Synergies Inc.,2007, http://www.corpsyn.com/pdf1/CSG_WhitePaperSECURED.pdf

3. University of Alaska, Benefits Department, Health and Wellness Plans, Joint Health Car Committee, December 7, 2009, http://www.alaska.edu/benefits/joint-health-care-committ/a12-07-2009/

4. BlueCross BlueShield of North Dakota, The Blue Innovations Report, 2009, http://www.blueadvocacy.org/plans/view/bluecross_blueshield_of_north_dakota

5. Marvin Windows and Doors Joins Campaign, Company press release, Feb. 7, 2007, http://www.marvin.com/?page=press_release&pressid=187


6. Marvin Wellness Programs, MN Chamber of Commerce, June 19, 2007, Elaine Buddington
Director, Compensation and Benefits, Marvin Windows and Doors, http://www.mnchamber.com/news/Archived/MarvinWindows.pdf


7. Employers see well-designed worksite health and wellness, July 28, 2009, Healthcare Finance News

8. Doing Well through Wellness: 2006–07 Survey of Wellness Programs at Business Roundtable Member Companies, Business Roundtable

9. Wisdom at Work: Retaining Experienced RNs and Their Knowledge – Case Studies of Top Performing Organizations, Prepared for: The Robert Wood Johnson Foundation, Submitted by: The Lewin Group, March 25, 2009

10. 2008 Annual Report and 2009 Proxy, Johnson & Johnson, http://www.jnj.com/connect/about-jnj/publications/

11. Communications efforts adapted for diverse workforce, Business Insurance, Crain Communications, Inc., Jeff Casale, 09-14-2009, http://www.businessinsurance.com/article/20090913/ISSUE03/309139996

12. Deere & Company, Inc., 2010 John Deere Healthy Directions, http://www.deere.com/healthydirections/index.html

13. Financial Incentives for Wellness, Hay Group Holdings, Inc, Presented at the 2006 WorldatWork Total Rewards Conference & Exhibition in Anaheim, California, http://www.haygroup.com/pl/press/Details.aspx?ID=9874