Here is a wellness needs analysis to help you choose the best approach for your company. It is based on wording, definitions, regulations and related government proposals from the Employee Benefits Security Administration, Department of Health and Human Services and other ACA-related government writings easily found via Google. This serves to set a high-level framework — certainly not “legal advice,” yet respecting that, when it comes to government, today’s suggestions are tomorrow’s compliance issues.
More importantly, this perspective takes out the profit-driven vendor’s depiction of what might be best for your company. The essence is pleasantly simple. Wellness is defined by government in two forms:
1) Participatory Wellness: Provides health-related opportunities equally to all workers, such as reimbursed gym membership, classes on weight loss, smoking cessation and other health/lifestyle issues. Participants can be offered low-level rewards like gift cards.
2) Health-Contingent Wellness: Programs that seek to identify individual health factors and set individual requirements for risk conditions. The incentive/penalty aspects can be as much as 30% of the premium costs for the individual. Basically, smokers and employees with high cholesterol or body mass indices pay more unless they follow a “reasonable” regime with “reasonable” results to address these problems — “reasonable,” as a government term, being clear like mud.
I would wager most readers gravitate toward participatory programs, correctly assuming that they are less expensive, less intrusive and, frankly, more respectful of employees’ desires. Participatory programs generate goodwill, in the spirit of wellness, and help individuals who are determined to help themselves. Optimally applied, they offer a gentle positive push via passive awareness efforts, essentially “farming” for participants as opposed to actively “hunting” for candidates via the health screenings required in health-contingent programs.
Participatory programs seem like a no-brainer and therefore raise the question: Is there any logical place for health-contingent programs? After all, they cost a ton (averaging more than $600 per employee annually) and have not been shown to improve health or return dollar savings.
In some sense, they are totally illogical in presuming that today’s employees are tomorrow’s health risk for the employer. Consider that when any employee leaves, the employer has wasted the health-contingent wellness dollars spent on him. Further, few employers today offer retirement health plans and therefore do not “own” the highest-risk period of most employees’ lives.
Let me simplify further. When selling a house, you cancel and pro-rate your homeowners insurance on the day of closing. I submit that health-contingent wellness is as silly as allowing the next homeowner to use the remainder of the policy you already bought.
So, back to the question: Is there a logical place for health-contingent programs? Surprise! Absolutely! And the impact would be strong and immediate.
Health-contingent wellness makes sense in workplace environments with “presumptive benefit” requirements for workers’ compensation. Police, firemen and first responders in most jurisdictions are granted “presumptive” WC benefits for heart, hypertension, lung and related issues arguably connected to the stress of the job. Movements are in play to widen these benefits to include mental health disorders and cancers and to include other classes of public employees.
Most public workforces have low turnover and retirement health plans. Therefore, investing in tomorrow’s health today is a justifiable hedge against long-term risk. Also, and more importantly, presumptive benefits involve issues that can be mitigated by condition-specific wellness programs. Controlling cholesterol, high blood pressure, weight, anxiety, smoking, alcohol, etc. is effective and constitutes money well spent. Health-contingent wellness would identify those with health risks and set them on a personal improvement plan with expected milestones. Targeted employees would have as much as 30% of premium contribution at risk for noncompliance. The workforce, as well as the public, would be better served.
Editorial comment: I realize that engaging some public unions in health-contingent wellness presents a difficult collective bargaining issue. However, I submit that these employees must consider public interest. They should not be able to have it both ways. One can’t argue that the nature of the job is clinically connected to health conditions yet avoid known methods to mitigate those health risks. One can’t enjoy a luxury of expanded WC benefits without personal responsibility for health. Besides, the ACA says it should be so!
Quick Tip – Consider the Spectrum in Choosing Your Wellness Approach
For many employers, participatory wellness makes more sense. But don’t assume too quickly before making a critical assessment of your workforce.
Start from the extreme example of public employees with presumptive WC benefits and work backward to find your risk level. Questions to ask include: Do you have low turnover? Do you have an aging workforce? Do you have retirement health obligations? Are there specific issues that you can identify affecting today’s workers’ comp costs such as obesity, diabetes or other co-morbidities? What are today’s health costs telling you about your workforce? Can you make a near-term, dollar-savings case for addressing individual employees head-on in a health-contingent wellness program?
If you answered any with “yes,” then you may choose the route of health-contingent wellness. Approach this with precision. Manage health issues with proven programs and specific improvement expectations. My personal suggestion for vendor contracting is to install some mid-program “escape clause” if interim expectations and milestones are not met.
Common sense can prevail when it comes to wellness. Good luck!