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How one company lowered its health care costs by helping its employees stay healthy
The author of the first-person account below is vice present for people at Confluence, a 130-employee, Pittsburgh-based financial services technology firm.
For a number of years, Confluence operated a wellness program to reward employees with gifts for achieving various athletic milestones. But our insurance costs continued to climb while our medical claim rate remained stuck in place. As a company with one of the most generous health plans in Southwestern Pennsylvania, we pay 100 percent of the cost of employee health care—we knew that the potential payoff from lowering health insurance costs could be huge.
Here was the dilemma: our previous fitness program had awarded points for completing certain physical activities. Employees could redeem those points for high-value prizes—iPads, trips, cash and so on. And the program produced real winners. The problem was, those winners were the company’s resident fitness buffs—men and women for whom the program's modest exercise requirements seemed fairly routine.
But for the people who weren’t already icons of good health—those with sedentary lives and borderline vital stats—the program didn’t provide an appropriate incentive. If anything, it intimidated them. As a result, about 60 percent of our workforce simply ignored the program and everyone continued to receive comprehensive insurance coverage. We knew we needed to re-engineer the program.
The Search for Poster Children
Our CFO was a strong advocate for employee health and insisted that the firm become a poster child for wellness. In 2008, we tapped Wells Fargo Insurance Services, the company’s insurance broker/consultant, to help out. Eventually, we negotiated an agreement with UPMC, a Pittsburgh-based health care benefits provider.
We wanted to keep our robust health insurance program, as we saw its value as a key incentive in recruiting and retaining talented workers. Our goals at the outset were first, to find ways to reduce the cost of that benefit, and second, to encourage all of our employees—Olympians and sedentary team members alike—to take better care of themselves.
A Well-Tailored Plan
We worked with UPMC to develop a program that would work for our employees who are, to a large extent, computer specialists. To generalize, we fit many of the stereotypes—we’re hyper-competitive, gamers, work ridiculous hours and are completely at home with information collected and delivered electronically. Those characteristics aren’t necessarily unique to our industry, but the wellness program was devised to capitalize on them.
In 2010, we rolled out our new health care plan. It provided identical coverage to our earlier coverage, however this time it involved employee co-pays and deductibles. But there was a catch: all of those costs could be made to disappear by following a menu of health-related activities. Instead of high-value prizes like flat screen TV sets, which had little or no connection to health, the new plan’s rewards were explicitly linked to the prices employees paid for the benefit itself. We devised the program so that many of those reward goals could be met privately, off site. Even though the available savings were comparatively modest, the motivation to realize them turned out to be huge.
Steps Toward Better Health
The first and most important step in the process was to raise each individual’s awareness of where they stood with respect to their own personal health. A 20-minute online questionnaire devised by UPMC was posted to help employees and spouses identify their health risks and receive a baseline score. That became the starting point.
Next came step two—biometric screening, available either at work or at the employee’s primary care physician's s office.
It’s hard to gauge anyone’s health, particularly your own, without objective metrics. So every employee who wanted to continue receiving full coverage with zero out-of-pocket costs—and that turned out be more than 80 percent of the workforce—volunteered to have his or her baseline data collected for a personalized health assessment. The results contained some surprises. Many seemingly healthy employees had elevated blood pressure and glucose levels, even higher than the insurer’s overall client base. And a lot of them had made a habit of eating junk food—not exactly a recipe for good health.
Step three was to make appropriate selections from a menu of point-generating activities collectively identified as the “Take a Healthy Step” program. Accumulating a set number of points over the course of the year retained the employee’s eligibility for cost-free insurance. In addition, random gift card drawings were held throughout the year to remind and excite employees around the points “game.”
A Healthy Toolkit
An online package was introduced, including a series of wellness programs—exercise, smoking cessation, weight control, healthy eating and stress management—with each individual’s results automatically tracked by the insurer’s website. Annual physical exams, preventive care and cancer screenings, health event promotions, vaccinations and massages, as well as a "Lunch and Learn" series of informative presentations, also were included in the program. Continuous improvement remains a cornerstone of the evolving joint effort.
Starting in the summer of 2012, a weekly on-site health coach was added, helping people with one-on-one counseling and referrals related to any health issue the employee faces. More recently, a Wellness Committee was formed to oversee the entire program and devise ways of making it work even better.
Return on Investment: Lower Premiums
As a result of these efforts, Confluence was able to reduce its health care premiums by 13 percent for our last renewal, effective at the beginning of 2012.
As enthusiasm for the wellness program—and, increasingly, its team activities—continues to spread, we expect the program’s reach and effectiveness to grow over time.
Wellness Lessons Learned at Confluence
• Don’t scare away employees most at risk for health problems; lower entry barriers to include sedentary workers.• Financial rewards work best when they are closely linked to out-of-pocket health care costs.• Craft a program that leverages off a company’s own workplace culture.• Appearances can be deceptive, especially regarding health. A person’s vital metrics don’t lie.• Find a capable wellness partner to work with.
• Don’t scare away employees most at risk for health problems; lower entry barriers to include sedentary workers.
• Financial rewards work best when they are closely linked to out-of-pocket health care costs.
• Craft a program that leverages off a company’s own workplace culture.
• Appearances can be deceptive, especially regarding health. A person’s vital metrics don’t lie.
• Find a capable wellness partner to work with.
Janis Shaw is vice president for people at Confluence, aPittsburgh-based provider of global financial services software.
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