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A healthy employee is a better employee—happier and more productive. And in an era of steadily rising health care costs, a healthy employee is simply less of a financial burden on the company health benefits plan.

Employer-sponsored wellness programs, ranging from weight reduction and smoking cessation programs to

on-site corporate health centers with state-of-the-art fitness equipment, have been around for decades and proponents say they have a measurable positive effect on the health care costs of participants.

But now, more than ever, employers are looking for help in improving participation in these programs as they struggle to put a lid on cost increases with a shotgun blast of health improvement and utilization control techniques.

Hewitt Associates in Lincolnshire, Illinois, surveyed more than 500 large U.S. employers with a combined total of more than six million employees and family members about health care cost concerns. Respondents said they anticipate a cost increase of 12% for this year, but they also said they can afford a maximum increase of only about 8%.

How can they cope with the cost gap? According to the survey, employers are putting new emphasis on the elimination of some of the root causes of escalating costs by including expansion of consumer-driven plan designs to drive down utilization, encouraging increased use of disease-management programs to improve adherence to treatment programs, and adding more wellness efforts to improve overall employee health.

More than 83% of respondents said they now use disease management programs, up from 74% last year. About half (49%) profile chronic conditions in the workplace with health risk assessments, up from 42%; and about 30% provide incentives for participation in wellness plans, up from 21%.

Agents and brokers are often at the forefront of proposing new consumer-driven health plans and may also assist in communicating disease management programs, but only rarely are they at the forefront of wellness programs which are either directly provided by health insurers or by independent vendors that solicit employers directly.

However, as the pressure for health care cost solutions grows, so will the pressure on producers to provide them, says William R. Borton, CLU, a producer in the employee benefits division of Fleet Insurance Services in Mt. Laurel, New Jersey.

Fleet Insurance Services has 300 employees and is a wholly owned insurance brokerage division of Bank of America. The division was acquired by BOA last year when the company acquired Fleet Boston Financial to form the nation’s third largest bank holding company.

“Producers are always in competition, either to acquire new business or retain existing clients,” he says. “When the clients have a need, the situations can be an opportunity for agents who can provide some answers. ”

Last year, the opportunity arrived when the health plan provider of a large self-funded client recommended a series of new wellness programs as part of a comprehensive plan to reduce health care utilization, he recalls.

“The client had experimented with a wellness program before by sponsoring a weight loss system in the workplace, but it generally did not have particularly good participation,” Borton says.

When the carrier recommended the new programs, the employer was interested but had an important question: How do we get employees to participate?

The insurer offered the usual communication program and collateral literature, but Borton offered a more specific answer: Provide incentives for wellness, the same way employers offer incentives for job safety and customer service.

Borton recommended Employee Power, a new wellness incentive program marketed by IncentOne in Carlstadt, New Jersey. Founded in 1997 as a provider of gift certificate incentive services, the company also provides a Web-based incentive tracking and delivery system that allows employees to earn incentive credits at work and choose their own rewards from an online catalog while tracking their choices for the employer. The incentives include gift certificates and gift cards from major retailers, brand name merchandise, travel packages and phone cards.

Employers pay an annual per-employee management fee based on the size of the group plus the dollar cost of the incentive awards.

IncentOne provides the program to more than 4,000 employers that use it for safety and sales performance management.

IncentOne tested application of its incentive system for corporate wellness last year and formally introduced Employee Power as a separate application early this year.

“When we think of critical business objectives, none are more important with chief executive officers and senior human resource executives than health care costs,” says Michael Dermer, IncentOne president. “It’s no secret that companies are aggressively looking for ways to drive health care costs down.”

Wellness programs have a time-tested return on investment, Dermer notes, when employees follow through with the programs. “The problem with wellness programs is that employees may not stay with them long enough to change their behavior,” he says.” And human resource executives and employee benefits managers simply don’t have the time and resources to track participation and keep up the level of encouragement they require. ”

The Employee Power program ties IncentOne gift certificates to completion of specific wellness goals, such as completion of a health risk assessment form that identifies long-term risks for employees and suggests wellness alternatives.

“The health risk assessment is the cornerstone of most wellness program and provides the health plan provider and employee with guidance about their continuing wellness goals,” he says. “The health risk assessment provides the information employers need to align employee goals with the employer’s goals of reducing utilization and costs. ”

From the health risk assessment, the health plan and the employer can recommend any or all of wellness programs that apply to each employee’s needs. The incentives can apply to participation in exercise programs, weight reduction, smoking cessation programs or nutritional education seminars, Dermer says.

The incentives can also support completion of specific tasks, such as flu shots or immunizations, or advancing through fitness levels or specific goals.

Borton says the Employee Power program was a good fit for his client whose employees were particularly tech-savvy and comfortable with the idea of interacting directly with the program through the Internet.

“I originally encountered IncentOne at a presentation the company made to the New Jersey Technology Council, and was particularly impressed with the way the wellness incentive program leveraged the rewards management technology and applied it to the new set of goals,” Borton says.

“For high-tech employers, the Internet is the preferred method by which their employees communicate. The online delivery system is very compatible with these employers and the turn-key application takes the management of the program out of the hands of the corporate executives but leaves behind all of the program value,” Borton says.

Borton said the online delivery system also provided “a message component, ” reinforcing the value of the program and additional educational information.

So far, the program has been well-received by his client and its employees, and Borton says the brokerage has received its own reward for meeting client goals: retention.*

The author
Len Strazewski has been covering employee benefits issues for more than 20 years and is employee benefits editor of Human Resource Executive magazine. He has an M.A. in Industrial Relations from Loyola University