A Wellness Program Primer
Jul 12, 2016
Sleeping is all in a days’ work at Aetna. The U.S. health insurance giant recently announced it would pay employees to get at least seven hours of sleep each night. Workers use their own devices such as Fitbits to track their sleep patterns, and those who successfully meet the goal can earn up to $300 a year. While its pay-to-sleep program is a bit unorthodox, Aetna’s commitment to employee health isn’t. A recent HR management report shows about 70% of U.S. companies now offer their workers wellness programs, hoping to capitalize on a trend that’s already backed by strong ROI.
A Harvard University study, in fact, found that for every $1 invested in a corporate wellness program, companies could receive a $6 return on investment, a direct result of reduced medical costs and a drop in absenteeism. Companies that jumped onboard initially for the financial benefit are also finding additional, less tangible perks, like energizing and motivating their workforces. Indeed, corporate wellness – which has evolved into an $8 billion industry according to IBISWorld – is clearly an important business strategy, impacting firms’ bottom lines, as well as employee productivity and culture. Promoting these initiatives, and enticing employees to participate is critical to their success.
Baby boomers are the leading force in health and wellness, and no other demographic has more buying power, says Ron Williams, marketing director for a major promotional products supplier and former sports medicine physician. “Baby boomers are sick and tired of being sick and tired: 73% have chronic health issues, while 77% of all prescription drugs and 61% of over the counter medications are bought by boomers. No wonder they’re concerned about getting their health back. Behind them are the Generation X-ers and millennials, and according to Williams, both these groups are even more concerned about their health than the boomers. “They don’t want the same health issues as their parents and grandparents. They don’t want GMOs or preservatives in their food, and they are opting for a healthy lifestyle”, he says.
With group healthcare rates spiking – some soaring by double digits in 2015 – companies are promoting healthier workplaces to help cut down on healthcare claims. Some insurers offer lower premiums to companies that offer wellness programs. In turn, healthier employees make fewer medical claims and take fewer sick days. The approach is proactive versus reactive, encouraging employees to take charge of their health and make positive changes, rather than waiting until they develop serious health problems, which are much more expensive and harder to correct.
“The Wellness Council of America (WELCOA) is a great point to begin with wet feet and be steered in the proper direction,” says Williams. WELCOA provides training, resources, webinars and case studies, all about workplace wellness. About half of LHD Benefit Advisors’ clients have a wellness program in place, according to senior benefits advisor Frank J. Grimm. The Indianapolis-based full-service employee benefits firm primarily works with companies that have 50 to 1,000 employees. “In our space, companies are looking for wellness recommendations, communication, education and delivery,” says Grimm. The adoption of wellness programs according to Grimm is more about the culture of a company than its size. In the early stages of wellness, cost was the focus, but progressive companies are recognizing the add-on benefits. “The best programs positively impact costs, and encourage team activity and participation,” Grimm says. One LHD client, Clarke Engineering Services, recently made its first foray into wellness. In order to qualify, employees had to get a physical within one calendar year. In return, workers got back $20 per paycheck for benefits, for a total of $40 per month. Clarke has about 100 employees. This proved to be a powerful incentive – every single employee signed up. “We decided to start slow with our group and build on it in the future,” says Clarke HR manager Aimee J. Parrish. “My goal is to get this group healthy.”
Incentives, no doubt, are key, but cash isn’t always king. “The most successful programs have multiple designs, which might be gift card programs, challenges that allow participants to enter drawings for gift cards or rewards, Web stores and promotional items. Sometimes something like a water bottle gets employees excited,” says Grimm. In another program for a large university that wanted to emphasize well visits, employees had already received Fitbits to track the existing programs, such as calories burned. So, a program was created with A, B and C incentive products ranging from $10 small headphones to $200 Bose speakers. The program involved continual messaging: one quarter, it encouraged employees to get up from their desks, the next pushed staffers to drink more water with bottles that had a measuring device on the side. The third quarter offered up a lunch bag and calorie guide, and Q4 included a duffle bag and gym membership. If members completed well checks and achieved their goals, they got a free year membership to a gym, as well. They could also receive an incentive prize from an online system, which varied depending on how many points they earned from the program administrator.
There’s no such thing as a one-size-fits-all wellness program. Every business is individualized, and while certain aspects of wellness programs might work well across numerous companies, understanding the basis of an employers’ workforce and their employee health tendencies is crucial. Of Aetna’s 50,000 employees, some 34,000 currently participate in its wellness programs, says communications director Ethan Slavin. About 40% of participants use a wearable device to log their healthy activities. In addition to its year-round Healthy Lifestyles program, which uses cash incentives, Aetna also offers a “Get Active Aetna” initiative in the fall which is a team-based wellness challenge for employees. If they meet certain healthy activity requirements during this period, they have the opportunity to earn Aetna gear, like gym bags, yoga mats, water bottles and other apparel, or they can donate an equivalent to charity, Slavin says.
- Companies that implement a wellness program experience a 28% reduction in employees calling out sick. (Institute for Healthcare Consumerism)
- By 2018, obesity-related healthcare expenses will cost the U.S. an estimated $344 billion annually. (fitness.gov)
- 71% of U.S. employers believe wellness programs are effective in cutting costs. (Kaiser Family Foundation)
- Employers are expanding their corporate wellness programs, spending an average of $693 per employee on incentives last year, up from $595 in 2014 and $430 five years ago. (Fidelity Investments)
Did You Know?
APTCO can help you develop a wellness program that meets your specific needs.
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