Wellness programs are an innovative and effective approach with potential to drive down future health care costs for employers. According to the U.S. Bureau of Labor Statistics, from 1999 to 2005 access to employer-provided wellness programs rose from 17 percent to 23 percent.
While some statistics tout compelling business returns for wellness programsfrom $1.50 to $17 per $1 investedreducing costs is only one objective. The bottom line is about people: Enhanced morale, higher employee job satisfaction and less absenteeism and presenteeism (at work but with a lack of focus or productivity).
Some insurance programs offer reduced prices to members or groups that are proactive about maintaining their health. And there are plenty of companies willing to sell you their version of a complete wellness program. Services can include wellness coaching, body-metrics measurements, onsite activities, off-site activities and nutrition counselingat a significant price.
But some employers might not want to settle for a pre-packaged wellness program that runs the risk of not addressing a companys unique needs. Here are steps for designing a wellness program tailored to your organization.
Step No. 1
Set the Goals of the Program
The first step is to define your goals. For many organizations, this equates with reducing health care costs. Perhaps absenteeism numbers are higher than desired. Maybe a companys culture encourages unhealthy eating on a regular basis (doughnuts and cake for every occasion) and the firm would like to promote a healthier celebration of milestones and accomplishments. Collaboration with an insurance company could reveal other health care cost trends that need to be addressed.
Step No. 2
Decide the Companys Level of Involvement
The next step is to decide on a level of intensity for your program. This is influenced by industry and company culture. A small business may not have the ability to close for an entire day and host a health fair for its employees, and a large multi-state organization cannot bring all its employees together for one companywide event.
Companies with thousands of employees might feel limited to rewarding employees for what they do on their own time outside of work. However, the convenience in onsite availability of prevention-oriented activities such as flu shots, cholesterol tests and blood pressure screenings is likely to increase participation. Getting in to see a doctor for an annual checkup is often too much of a hassle for full-time employees.
As long as employees are feeling moderately well, they will usually put off check-ups, relying on doctors only when they are very sick. Having routine wellness checkups available in the workplace makes a normally daunting task as convenient as getting a cup of coffee.
Wellness Programs: Levels of Involvement
Little company involvement; employees must earn their rewards outside of work on their own time.
Company may host small events for employees, such as yearly flu shots; minimal involvement with outside vendors.
Adequate company involvement; employee can enjoy some onsite activities to earn rewards, such as blood drives, cholesterol readings, etc.
Company will establish one or two outside vendor relationships to help host events.
Company invests significant time into onsite events for employees, such as Wellness Days with various events.
Company will sponsor or reward participation in outside events (5K walks, CPR certification classes, etc.)
Company will establish several significant relationships with outside vendors to aid in presenting events and promoting healthy activities (gym memberships, etc.)
Step No. 3
Establish the Budget and Expected ROI
A wellness program budget should be presented to your companys executive team with full disclosure that return on investment (ROI) numbers wont be realized for several years. Establish metrics for measuring ROI at the beginning of the programs implementation based on productivity, absenteeism and health insurance usage. Some organizations design longitudinal studies to measure the aggregate health of their employees over time.
Whatever the approach, common sense dictates that healthy employees are more productive, use fewer health care services and enjoy higher morale than others. Quantifying these qualitative assumptions is an essential component of monitoring ROI and improving your wellness program.
Step No. 4
Choose Employee Rewards
The argument for rewarding employees for participating in a wellness program pulls from the basic principles of behavioral psychology: People are driven to act by the positive consequences they expect from their action. Rewards increase the likelihood that employees will get involved in a wellness program. Its easy to reward people who already live a healthy lifestyle. The challenge is to motivate those who dont and are probably using health care services reactively rather than preventatively. In the long run, the health problems of these employees may become extremely costly (such as cardiac and cancer treatment).
Building a rewards system into your wellness program is a great motivator. Rewards can take many forms, including points that can be exchanged for goods, gifts celebrating accomplishments or monetary awards. Over time, the motivation for rewards shifts from an external incentive to intrinsic reinforcement. While, at the outset, employees exercise or schedule their annual physical to earn points or gifts, they eventually begin to experience fewer colds, weight loss, more energy and peace of mind.
While at first employees exercise or schedule physicals
to earn points or gifts, they eventually begin to experience
fewer colds, weight loss, more energy and peace of mind.
Since the cost of incentives will be included in the budget, HR may wish to create a hypothetical John/Jane Doe who takes advantage of every possible opportunity to earn rewards so you can identify the maximum costs for your rewards program. Another method is to create a high, middle and low level of involvement for the company and to estimate costs based on each level. Chart out a years worth of events and estimate what kinds of costs will be involved for your company to host a wellness program.
Step No. 5
Write and Communicate Your Policy
Your policy should include your companys intent, level of involvement and rewards system and an acknowledgement of legal considerations. Intent describes the goal of the program and communicates to employees that you are investing in their health and well being. By detailing your organizations level of involvement, HR helps employees understand what they should expect from the program and what kinds of activities and events the company will be sponsoring.
In communicating the reward system to your employees, passing along a John Doe example may help them to see the program in real-life terms. If your firm is rewarding employees with points for their activities, provide a list of activities and their point values, as well as a form they can fill out to submit points. The easier you make it for employees, the more they will participate. Finally, legal considerations should be discussed with an attorney and might include:
• Acquiring informed consent from all employees that participate in the program.
• Communicating to employees that they should consult with their doctor/trainer/nutritionist before starting any diet/exercise/weight loss program
• Providing a clear statement that employees assumes the risk(s) of their wellness activities.
• Informing employees that they are protected under HIPAA (Health Insurance Portability and Accountability Act) and the ADA (Americans with Disabilities Act), which ensures that medical information that they voluntarily provide to HR will be kept private and, if it is medically inadvisable or unreasonable for them to attempt any standard of the program, that another method will be designed so that the employee can earn an equivalent reward.
Program Implementation at Leaders Bank
Leaders Bank in Oak Brook, Ill., ranked as the No. 1 small/medium-sized company by the Best Places to Work in Illinois award program, is known for its commitment to employee well-being. Leaders has an unusually comprehensive wellness program boasting 95 percent employee participation, with a 20 percent growth rate for program participation since its June 2006 launch.
The Leaders Bank wellness program emphasizes a commitment to the health of all employees and views wellness as a core component of the employee benefit package. Strong support from the executive leadership team (president/CEO, CFO, EVP/chief lending officer and the SVP/director of HR) was instrumental in the design and implementation of the program.
"Power Point rewards can be earned by making healthy choices within four pillars: health, early intervention, teaching and way of life. The program lets employees earn points by doing whats good for them, choosing from a wide array of wellness activities, including biometric screenings (blood pressure, cholesterol, etc.), fitness club memberships, stress reduction seminars and community events, like 5K walks. Power Points can be saved, or, quarterly, employees can cash in their points to shop through an online mall.
Employee participation is tracked confidentially by HR.
Examples of Activities from the Four Pillars
Health. Physical activities, exercise, community sports leagues, weight loss.
Early Intervention. Annual medical exams (e.g., mammograms, prostate exam), immunizations/flu shots, diet/nutrition assessment, health risk assessment.
Teaching. CPR or first aid certification, blood donation, health magazine subscription, health seminar, stress management class.
Way of Life. Healthy lifestyle choices, disease or pregnancy management under doctor supervision, alternative medicine, smoking cessation program, rehabilitation/physical therapy.
A kickoff event was led by HR and promoted to employees via staff meetings, e-mails, the employee intranet site, and an employee newsletter. A Wellness Committee was created to try to ensure accurate representation of employee feedback.
Employees were provided with welcome packets that described the program, the reward system, types of activities, point values, a John Doe example, an enrollment form and sample forms to fill out with their healthy activities.
The kickoff event was designed as a Wellness Day and provided onsite activities for employees to use throughout business hours, including a comprehensive blood screening paired with a health risk assessment, followed by a healthy lunch. This screening included cholesterol, blood sugar and a broad range of lab results to share with physicians. Confidential scores were mailed to employees at their homes. Management received an aggregate report on the overall health of Leaders Bank employees. Based on these trends (e.g., blood pressure, weight management, etc.), HR is now able to tailor events to address these needs.
A follow-up Wellness Day included additional events. A cooking demonstration described methods to reduce fat and calories in home-cooked meals. A diet analysis provided employees with a complete breakdown of their nutritional regime and was communicated through a callback at home to ensure confidentiality. The Wellness Day featured educational booths, flu shots, CPR certification and chair massages. Leaders Bank plans to host three Wellness Days annually.
Outcome: Whats the Bottom Line?
During the first calendar quarter of the program, employees earned the equivalent of $300 per employee in Power Points. On average, employees cashed in $100 worth of points to shop online and banked $200. The annual budget assumes that the average employee will earn the maximum of $1,200 in Power Points.
Leaders Bank employees and departments can elect to have their point totals posted in the lunchroom, initiating some healthy competition. Point submissions are a daily occurrence in the HR department. Program champions have taken the initiative to organize sporting events for employees outside of work. Employees are sharing cooking ideas, stretching and cardio techniques, and they are suggesting places to run, bike and hike.
Although too early to measure, it is expected that at the end of three years the organization will realize an ROI consistent with the metrics reported in the literature$1.50 to $3.50 saved for every $1 spentas measured by reductions in usage of health care benefits, decreased absenteeism and increased productivity and morale.
ROI will be measured annually. The baseline biometric screening conducted at the outset of the program will be scheduled annually to quantify the savings achieved through the organizations investment in employees health.
To further determine ROI, privacy-protected baseline aggregate screenings of employees health status will help Leaders track program success over two years. Impact on employee health, attendance, productivity, morale and health insurance benefit usage will be measured. Leaders say they will continue expanding program offerings indefinitely, listening to employees for new ideas and directions.
Steve Ritter, LCSW is the senior vice president, director of human resources at Leaders Bank in Oak Brook, Ill. He teaches on the faculty of the sociology department at Elmhurst College. Allison Potempa is an accounting associate at Leaders Bank.
Related Case Studies:
Best Employer Programs for Healthy Lifestyles: Key Components, Comp & Benefits Focus Area (May 2007)
A Wellness Program Reaps Cost Savings for Unionized Workforce, Comp & Benefits Focus Area (April 2006)
At Pitney Bowes, Healthier Employees, Healthier Bottom Line, Comp & Benefits Focus Area (April 2006)
Developing a Cutting-Edge Wellness Program, Comp & Benefits Focus Area, (July 2005)
Related Wellness Articles:
Financial Incentives for Wellness: Tips for an Effective Program, Comp & Benefits Focus Area (May 2007)
Health Coaching: A Helping Hand for Getting Better, Staying Well, Comp & Benefits Focus Area (May 2007)
Workplace Screenings Reveal High-Risk Health Factors, Comp & Benefits Focus Area, (January 2007)
SHRM Online Benefits Discipline