Wellness Agenda: Stay Well Together

When it comes to designing and implementing wellness programs, employers are realizing that working with employees is not enough. These employers are expanding their programs to include employees' family members, resulting in demonstrated reductions in health plan costs for some companies. Achieving family participation and behavioral changes, however, can be challenging targets and ones that require special effort.

A 2012 report from the Health Enhancement Research Organization (HERO)on employer health management practices found that three-fourths of employers that offer both health assessments and lifestyle management programs include spouses in the programs.

The report, HERO Employee Health Management Best Practice Scorecard, found clear motivation for including spouses among the 788 employers surveyed: Although spouses typically represent only about one-fifth ofthose covered in employer-sponsored health insurance plans, researchers found that the average medical cost is about 30 percent higher for spouses than for covered employees, thereby presenting greater opportunity for savings. The higher cost for spouses is in part due to the higher costs of medical care for female spouses at certain ages and for spouses who are older or who have disabilities, says report co-author Steven Noeldner, a Mercer partner.

Including spouses in wellness programs delivers a dual benefit. In addition to reducing spousal health care costs, spouses are powerful drivers of positive—and negative—employee wellness behaviors.

HERO researchers found that a wellness program is more likely to yield benefits when spouses are included. Employers that include spouses in key components of employee health management benefits reported employee participation rates in lifestyle coaching twice as high as those that did not include spouses—28 percent vs. 14 percent. They found similar results for other wellness programs.

"We're seeing a trend of including spouses and children in wellness activities," says Noeldner. When employers initiate health management programs, they often are cautious and want to start just with employees, he says. Over time, he continues, they realize that spouses cost more to insure than employees. Through wellness programs, employers can address higher costs associated with less-healthy family members.

Still, some benefits professionals are only feeling their way toward family wellness programs. "There is still no good off-the-shelf wellness program for families," says Stephanie Pronk, senior vice president on the Innovation Team in Health and Benefits at the national practice of HR consultant Aon Hewitt.

Noeldner says employers who domake the same wellness benefits available to employees and families commonly offer health assessments, life coaching, smoking cessation programs, weight reduction programs and disease management.

Healthy Results

Freeport, Maine-based retailer L.L. Bean offers its 5,000 year-round employees, 1,200retirees and 5,000 seasonal employees access to a variety of wellness programs.Benefits include onsite fitness facilities, Weight Watchers, health education classes and a variety of exercise classes. The programs are open to all employees and spouses, even those not covered under the company's health insurance plan.

The company also makes health risk appraisals available to family members of year-round employees who are covered under the health plan. Employees and families who choose to participate enjoy health insurance premium reductions of between $2,000 and $2,900, depending on the plan. If a spouse is covered under the plan, both the employee and the spouse must participate to receive the benefit.

Susan Tufts, L.L. Bean's wellness manager, says 87 percent of L.L. Bean's benefits-eligible employees participate in health risk appraisals, and two-thirds of that group have spouses who participate as well. Company officials rigorously measure results, which they say are compelling: For employees and spouses, Tufts says, from 2007 to 2010 there were 22 percent fewer individuals with high cholesterol, an 18 percent reduction of individuals with high glucose levels and a 42 percent reduction in smoking rates.

That results in large savings when measured against program costs. In 2007, the first year of the L.L. Bean program, Tufts says the program resulted in $1.70 in medical cost savings for every $1 spent. Four years later, it rose to $4.40 for every dollar spent, though she adds there have been no studies specific to the inclusion of family members.

Toyota Motor Manufacturing in Indiana is aggressively expanding its wellness program to serve employees' families. The company has 4,983 full-time and "variable workforce" employees who are eligible for wellness programs and about 13,000 dependents who can participate in the wellness programs if they are covered under the health care plan.

"For the first two years, our wellness program was directed at just team members [employees] and just in the areas of tobacco cessation and weight loss," says Krystal Kennedy, manager of health and safety. "Some employees commented it was hard to stop smoking or eating poorly when their spouse was still smoking or eating poorly. In 2009, our third year, we offered the same programs to dependents as well as team members and actively encouraged their participation—such as asking employees when they sign up if there is anyone else we can get involved. Now, dependents can take advantage of anything our team members can."

Kennedy says every wellness program the auto company offers has a target for participation or results. In fiscal 2013, roughly 83 percent of team members and 17.5 percent of dependents participated in at least one program. The company would like to increase dependents' participation to 60 percent.

Now the health and safety team wants to get employees' children to exercise more. The company added a foot race for kids three years ago; 320 kids competed for medals in the last annual race.

Encouraging Participation

Extending incentives to spouses drives participation, many HR professionals and consultants say.

"When clients offer family members the opportunity to participate without incentives, we have found that participation rates are often more than 40 percent lower than when incentives are involved," says Heather Provino, chief executive officer of Provant Health Solutions LLC, an East Greenwich, R.I.-based provider of wellness services.

Participation in wellness programs could increase due to upcoming changes to federal rules on financial incentives. Regulations now provide that employers can use up to 20 percent of the cost of health plan premiums as an incentive to encourage employees to participate in wellness programs, says Garry Mathiason, co-chair of the corporate compliance practice group at the San Francisco office of law firm Littler Mendelson.

Mathiason notes that on Jan. 1, 2014, new regulations from the U.S. departments of Health and Human Services, Labor, and the Treasury will allow incentives to increase up to 30 percent, and up to 50 percent for anti-smoking programs.

Mathiason cautions employers against tying incentives to family participation in wellness programs if family members are not covered under an employer's health plan. In some circumstances, such incentives could violate applicable laws and regulations. If family members are covered, however, then incentives can be tied to participation by family members, Mathiason says.

Communication also improves participation in family wellness programs, Mercer's Noeldner says. "Don't expect simple mailings to the employee's home will be read by the spouse and be impactful on their own. Be creative in the ways you reach out."

Some employers facilitate participation by integrating wellness programs with health care plans. Since 2006, about 11,000 spousal and dependent health plan participants as well as 31,000 benefits-eligible employees in Duke University's health management and health evaluation program have been eligible for referral to Duke wellness programs that may be useful in treating their health challenges, says Dr. Carol Epling, director of Duke employee occupational health and wellness. "The eligible dependents agree to health risk assessments and health coaching but can opt out," she adds.

Smaller employers tend to offer fewer family benefits, often because their wellness programs are less developed. But there appears to be no bars to smaller employers having effective family wellness programs and, indeed, smaller employers may sometimes have advantages if managers have close relationships with employees.

"Smaller employers may be self-contained in a local area and may have a greater cohesiveness," says Noeldner. "If you develop a sense that you are a family-oriented organization, you may be better able to encourage spousal participation."

Some suggest an incremental approach. "Companies may want to introduce portions of the program slowly to limit expenses, or consider options that don't have a direct financial cost," says Susan Marsico, director of corporate benefits and HR systems at Dublin, Ohio-based Online Computer Library Center Inc. "Run a pilot to either limit the number of participants or to assess the longer-term financial savings [or] impacts."

An incremental approach makes sense strategically: "A mistake many companies make is to roll out a blanket program and roll out incentives," says Toyota's Kennedy. "Tailor the program to the needs of the individual and his or her family."

As family wellness programs become more robust, opportunities for plan development emerge. "With more adult children enrolling in—or expected to enroll in—our medical plan due to recent legislative changes, it will be more important to extend wellness programs to adult children," Marsico says.

"People matter," concludes L.L. Bean's Tufts. These initiatives "are not just about reducing costs," she says, adding, "These should be long-term initiatives. We have spent 30 years supporting these. And remember that there may be many, many factors affecting these behaviors. If you keep the people in mind, the cost improvements will follow."