Nebraska-based Lincoln Industries (formlery Lincoln Plating), a mid-sized manufacturer, has incorporated wellness into the fabric of its organization with substantive returnsits health insurance costs are 50 percent less than the U.S. average, and the company has reaped a 6-to-1 total return on its wellness investment.
The firm's efforts have grown over the past 20 years to become one of the nations most recognized models for wellness, and can serve as a model on how to begin or revitalize a wellness program at your organization.
Real Problem, Real Solutions
"Last year, the average health care increase in the U.S. was 18 percent per organization," noted Dan Krick, PHR, vice president for human resources at Lincoln, a metal finishing and supply chain management company with 450 employees . He added that the average health care cost for tobacco uses is from $1,200 to $6,000 higher than for non-tobacco users, and that health care for obese workers costs 36 percent more than for normal-weight workers (while their medications cost 77 percent more). In fact, obesity costs U.S. companies an estimated $12.7 billion annually in lost and restricted workdays and physician visits.
"The problems are real, representing significant costs, and that calls for real solutions," said Krick. "This is where, from an HR standpoint, we can really lead and provide a solution that's going to have a significant impact for your organization."
Lincoln Industries' Wellness Program
Lincoln Industries has worked closely with the Wellness Council of America in developing a series of wellness initiatives. "We didn't immediately jump in and enjoy 50 percent savings in health care," said Krick. "The program's development was evolutionary, not revolutionary, with little tweaks along the way at a rate that people could digest."
"We began with a first aid cart and blood pressure checks in the 1970s," said Tonya Vyhlidal, the wellness manager for Lincoln Industries. "In the 1980s, we brought in awareness activities with posters and pop-up tents. Education became an integral part of the program, and we started to provide "lunch & learns" along with informational materials. In the 1990s, a cross-functional Wellness Committee was formed, with representatives from departments throughout the company. Currently, the committee has 10 members, two of whom currently are upper-level management."
• Full-time wellness manager hired.
• Testing/intervention becomes integral part of the program.
• Tobacco free campus established. No smoke breaks.
• Annual 14,000-ft. mountain climb challenge established.
• Quarterly checks become mandatory for all.
• All employees required to have wellness performance objectives.
• Wellness becomes integrated into performance management process and incentive plan.
Among the chief components of Lincoln Industires' wellness program are the following:
• Initial and annual health assessments. Testing is free and "on the clock," and includes initial and annual blood profiles (cholesterol, triglycerides) along with mandatory, quarterly blood pressure screenings, flexibility tests and body fat/body weight analyses. Initial and quarterly consultations are held with the company nurse to discuss individual wellness goals and objectives for the year (if medical problems are suspected, the employee is immediately sent to a physician). Pocket wellness cards record the employee's goals (weight, body fat, etc.) as measured against quarterly checks; on the flip side are wellness tips.
• No smoking. "If people choose to smoke, they are not going to do it on our campus, and theyre not going to do it on our time," Krick said. "We pay for breaks, so we dont allow smoking on breaks. During the lunch hour, if they choose to smoke, they can walk or drive off campus."
Tobacco cessation is an ongoing program, Vyhlidal added. "We offer it all year long for employees and family members, because they're your support system. It's free to them and it's on the clock." Being smoke free also means getting insurance discounts.
• Obesity. As with smoking, weight management is a central focus of the program. "We do Weight Watchers and other things, but I also hired a nutritionist and we've built the nutrition plan together," said Vyhlidal. Diet and weight management are checked during the quarterly consultations.
• "Mark Your Miles." Everybody gets pedometers for free, and an expressed goal is 10,000 steps a day. "We have a conversion chartmowing the lawn, gardening, doing dishes, chasing your children; it all counts," said Vyhlidal.
• Wellness Wednesdays. "People have the option of going out and walking or doing a list of activities we post each Wednesday," Vyhlidal noted. "They sign in and get credit for it. Some people call it 'recess.' "
• Activity reimbursements. Gym membership are reimbursed, along with the cost of other recreational physical activities for employees and their immediate family members, such as swimming lessons. "If your kids are active, you're more likely to be active, too," said Krick.
Other wellness components include a pre-shift stretch program, organized competitive cycling (the main event is billed as Lincoln Industries' "Spring Classic"'), educational seminars and one-on-one consultations as needed. Also, everyone receives the Mayo Clinic Health Letter.
And there's more. Wellness outings and challenges include:
• 4-, 8-, 12- and 14-mile walks.
• An annual mountain climb.
• 4-, 8-, 16- and 32-mile bike rides.
• Yoga and group fitness activities.
Key Elements of a Successful Program
• Garner top-level support.
• Build a mission and vision statement; integrate wellness into the company's strategic vision.
• Build a wellness committee.
• Build the program plan based on needs assessments; attach to company benefits.
• Surround program with policies and procedures.
• Health care and associated costs.
• Claims data.
• Risk factors and associated costs.
While better health perhaps ought to be enough of an incentive, from a practical viewpoint it takes a bit more. So the firm offers "wellbucks" that translate into lower health insurance premiums. "These are earned by people who come to specific programs, and each quarter they can be used to reduce health insurance premium," Vyhlidal said. An individual in the firm's hgh-deductible plan option, linked to an employer-provided health reimbursement arrangement (HRA), can receive 17 percent off the top, and a family can receive a 5 percent premium discount if all required activities are completed (do less, and you can still get a partial discount). Employees can rise up through various levels, from bronze, silver and gold to platinum (the healthiest), "and there are objectives and criteria they must meet for each of those," Vyhlidal added.
Regarding the firm's HRA, more than 73 percent of employees were enrolled in this consumer-directed health option, with lower premiums but a higher deductible than traditional health plans. "Employees who know the status of their health can make better-informed decisions," said Vyhlidal.
Wellness objectives are also tied to overall performance and pay (merit and incentives). "Just like any other performance competency, at your performance review you're being rated and evaluated on how you're doing relative to your wellness plan," said Krick. "The wellness objective you've established with your manager is tied directly into your merit increase and, for upper-level employees, your incentive plan."
He added a personal reflection: "Last year I missed my wellness objectives. It cost me somewhere between $500 and $1,000. I'm not missing my wellness objectives this year."
For those interested in an even more rigorous program, the company's Peak Performance Action Team (PPT) is an added push for self-development. Team members have individual development plans that include group training and individual coaching. "It's a great team building exercise," said Vyhlidal. "You end up with people you typically wouldn't be with during the day."
After the PPT's first six months of scheduled wellness activities, a post-assessment of members was conducted. The results showed a 10 percent improvement across 18 wellness categories, including:
• Systolic blood pressure: down 11.4 percent.
• Diastolic blood pressure: down 5.7 percent.
• Cholesterol: down 7.4 percent.
• Triglycerides: down 26.3 percent.
• Percent body fat: down 8.4 percent.
"You can't be successful without commitment from the top," Vyhlidal said. Wellness must become a company belief, "integrated into the fabric of the organization." At her company, the CEO and president set strong examples of personal commitment to the programwhich includes attending wellness outings.
Measurable Return on Investment (ROI)
Last year, the company reaped more than $1 million in savings due to its wellness efforts:
Savings in First Year
Health care cost savings (direct): $900,0000
(Lincoln Industries averages a cost per person of $3,400 vs. U.S. average of $6,800)
Related Savings: $200,000
• Workers compensation
• Weight reduction
• Turnover reduction
Total cost savings: $1.1 million
ROI: Approx. 6:1
"About 25 percent of the average U.S. company's health care costs are lifestyle related. We're after that piece of the pie," summed up Krick.
Concluded Vyhlidal, "It can be done."
Stephen Miller, CEBS, is an online editor/manager for SHRM.
Related SHRM Videos:
The Benefits of Wellness
Wellness programs benefit a company in financial and other ways, says Dan Krick, HR director at Lincoln Industries.
Wellness for the Family
Dan Krick, HR director at Lincoln Industries, offers two real-life examples of the importance of extending wellness initiatives to employees' families.
Related SHRM Articles:
Launching a ‘Winning’ Wellness Contest, SHRM Online Benefits, December 2012
Incentivizing Good Health: A Success Story, SHRM Online Benefits, October 2012