Is It Time to Trash—or Just Update—Your Wellness Program?

Cost savings are hard to pin down, but smart management helps drive success

By Lin Grensing-Pophal January 22, 2020
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Wellness programs have long been touted as a way to control health care costs by helping employees kick bad habits such as smoking and unhealthy diets and adopt better ones, thus reducing expenses for treating chronic diseases. Questions linger, however, over whether these initiatives result in measurable bottom-line results such as higher productivity, lower health care expenditures and greater employee loyalty. 

Often, underlying those questions is the issue of whether these programs are reaching those who need to get well or only those who already are well.

Do Wellness Programs Work?

Certainly, it's hard to argue that adopting healthy habits is a bad thing for anyone. The question for organizations, though, is more complex: Do the efforts they put forward, including the time that employees are allowed to spend engaged in various types of wellness activities on the company's dime, provide tangible payback that improves employer competitiveness?

Unfortunately, despite a high level of advocacy and interest, independent research suggests that the answer may be no, at least in terms of dollars and cents saved over the short term.

The April 2019 edition of the Journal of the American Medical Association published a report from researchers at Harvard Medical School and the University of Chicago who analyzed data from 160 U.S. workplaces with around 33,000 employees, comparing employers with and without wellness programs over 18 months. In Harvard Health Publishing's review of the research and its implications for organizations, faculty editor Robert H. Shmerling, M.D., noted that workplaces with and without wellness programs were found to have similar results for:

  • Self-reported health behaviors and outcomes such as regular exercise, sleep quality and food choice.
  • Health measures such as blood pressure, cholesterol and body mass index.
  • Employees' use of available tools to select cost-effective health care services and medications.
  • Absenteeism and job performance.

Shmerling predicted that there will be more research into the effectiveness of such programs. In the meantime, "while this study suggests the [cost-benefit] impact may be small or nonexistent, some programs may be better than others, and some people … may get more out of them than others."

[SHRM members-only toolkit: Designing and Managing Wellness Programs]

Ensuring Legal Compliance

Compliance is another wellness program challenge that vexes employers. "From a legal perspective, I see mostly cons," said Joshua Sutin, head of the employee benefits and executive compensation practice at law firm Chamberlain Hrdlicka in San Antonio.

Depending on the wellness program, employers need to ensure they're not violating the Internal Revenue Code, the Employee Retirement Income Security Act (ERISA), the Health Insurance Portability and Accountability Act (HIPAA), the Affordable Care Act (ACA), Equal Employment Opportunity Commission (EEOC) rules and more, Sutin said.

These requirements can be contradictory and challenging, he noted. For example, the EEOC sees wellness programs as potentially discriminatory against employees with health challenges such as obesity, "while HIPAA and ACA encourage discrimination" in terms of allowing employers to offer financial incentives that reward participating in wellness program and achieving health goals. 

Dealing with regulatory compliance can feel like "getting through a rock and a hard place," Sutin said, involving government filings and notifications to employees, along with creating policies and procedures to comply with all the rules. "Failing to do these required tasks can lead to penalties and fines," he warned.

"The more basic the wellness, the less risks," he added. "The more advanced the wellness program, the more complicated the legal implications."

Sutin does believe wellness promotion works but "only if the employer invests a lot of time, money and energy into making it an effective program." As part of this process, he suggested, companies need "experts—internally and externally—to guide them through the various compliance issues."

Tips for Success

A recent post by the nonprofit International Foundation of Employee Benefit Plans (IFEBP), a provider of research and education to benefit plan sponsors, advised that positive outcomes from wellness programs are more likely when employers take these steps:

  • Evaluate the current state of the workforce both in terms of employee health (in the aggregate) and employees' level of interest in wellness options.
  • Develop profiles of employees to determine those most and least likely to participate in the programs.
  • Deliver on-demand education and information to employees based on their personal interests—everything from symptom checkers to exercise videos.
  • Respond to (and monitor) frequently asked questions using chatbots to minimize time required from staff.
  • Use gamification to make wellness fun, including options such as introducing competition, providing rewards for meeting certain milestones, etc.
  • Provide ongoing metrics to evaluate program adoption, outcomes and costs.

Technology Can Help

As in many areas of HR practice, technology can help HR leaders monitor the cost and effectiveness of the programs they offer.

Many wellness initiatives, for instance, may not work because of poor design and ineffective, inadequate or nonexistent evaluation. Program management software, such as interactive online platforms, can help benefit managers identify and correct these issues.

SHRM's Vendor Directory provides listings for digital-wellness platform vendors.

"Fitness trackers and smartwatches continue to gain traction, making it easy for employees to receive real-time feedback on their health," IFEPB noted. While personal health information is protected by HIPAA, aggregate data can help employers to devise outreach efforts that address the top health challenges faced by the workforce or particular demographic segments, such as low-wage earners.

Program management software can also help employers keep their programs compliant with regulatory requirements.

There may be no easy answer to the question of whether wellness programs are worth the effort and cost, but monitoring program results and determining whether, and how, certain types of offerings might work best for their organizations and employees can improve employers' odds for success.

Lin Grensing-Pophal is a freelance writer in Chippewa Falls, Wis.

Related SHRM Articles:

Wellness Platforms Provide Flexibility, Raise Data-Privacy Concerns, SHRM Online, July 2019

Viewpoint: 3 Questions to Ask Wellness Program Providers, SHRM Online, July 2019

Wellness Programs Are in Limbo Without EEOC Regulations, SHRM Online, May 2019

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