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Wellness The Gateway to Lower Healthcare Costs 2012 “Healthcare Reform that Pays”

A White Paper Created by Mark Roberts Manager of National Accounts: Careington International 800-441-0380 ext. 2905


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Wellness is a multidimensional state of being describing the existence of positive health in an individual as exemplified by quality of life and a sense of well-being.

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Overview What is the definition of wellness? More than ever before, you hear this word in the news, on billboards, in conversation and even at work. Interestingly, there is no universally-accepted definition of wellness. There is, however, a set of common characteristics seen in most thoughtful attempts at a definition of wellness. You generally see a reference to a “state of well-being,” which is vague, to say the least, according to DefinitionOfWellness.com(1). Also frequently seen is a “state of acceptance or satisfaction with your present condition.” The truth is wellness is a tough word to define. Charles B. Corbin of Arizona State University gives this definition of wellness: “Wellness is a multidimensional state of being describing the existence of positive health in an individual as exemplified by quality of life and a sense of well-being.” Wellness is an active process of becoming aware of and making choices toward a more successful existence. ƒƒ ƒƒ

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Process means that improvement is always possible Aware means that you are continuously seeking more information about how you can improve. Choice means that you consider a variety of options and select those in your best interest. Success is determined by each individual to be their collection of life accomplishments.

The current buzzword in the employer market is wellness. Products and services in this category have received huge acclaim with companies that are driving down the cost of health care and promoting healthy living in their employee population. Employers are constantly looking for ways to increase profitability. Adding to the bottom line is critical for any company or business owner. Being able to keep losses at a minimum always keeps any employer on his toes if he plans to stay in business for any length of time on a long term basis. One consideration in this common theme among employers and managers is the health of his workers. Employees who constantly miss work due to health reasons are unprofitable to companies for several reasons—lost production of goods and services, lost time to service the business and customers, lost costs from paying sick time, and much more. To keep the doors open, employees need to stay healthy. According to the Small Business Wellness Initiative(2), there are many benefits of workplace wellness. Businesses that invest $1 in workplace wellness can often reap $3 to $5 in savings through lowered health care costs, decreased absenteeism and decreased workers compensation claims. Workplace wellness programs can significantly impact a company’s bottom line, particularly in small businesses where employee well-being weighs big on overall productivity. If you haven’t already considered how workplace wellness can benefit your business, now is the time to start. 3


Current Wellness Issues Healthcare costs pose a serious threat to the competitiveness and long-term viability of U.S. businesses which, in turn, affects us all. Consider the following: ƒƒ ƒƒ

Private business expense for healthcare consumes 40% of before tax profit and 58% of after tax profit. The cost of U.S. healthcare doubled from 1990 to 2001 and is projected to double again by 2012.

Traditional methods used by businesses to control healthcare costs, such as reducing benefits, increasing employee contributions and the more recent shift to consumer driven health plans, are all short-term fixes that fail to address the primary driver of the soaring cost of healthcare – namely inadequate investment in health through primary prevention, health risk management, and disease management. According to WellnessProposals.com(3), consumers also play a role in the financial crisis associated with healthcare. In general, consumers lack the motivation necessary to prevent conditions from occurring and / or reversing conditions once they develop. Research from the U.S. Department of Health and Human Services shows that: ƒƒ ƒƒ ƒƒ

65% of Americans are overweight or obese. 5% of Americans get little or no exercise. 7 out of 10 Americans that die each year die of a preventable chronic disease.

With poor lifestyle choices spiking employee medical and disability costs, as well as eroding productivity, the number of employers offering wellness programs increased to 45% last year from 37%. Larger employers were the most enthusiastic adopters (72% of those respondents compared with 61% the previous year). It’s easy to see why these programs are being embraced: 72% of wellness plan sponsors report that they’re an effective way to reduce medical costs, according to MetLife(4). According to BusinessInsurance.com(5), employers have recognized that under health reform, more than ever, the investment in human capital is what they need to be looking at as opposed to thinking of benefits as just an expense of doing business. The survey also found that when it comes to communicating information to employees, 52% are educating employees about how the law affects their benefits; 36% are describing what they, as the employer, plan to do; and 35% are explaining to employees what’s contained in the new law. Employers were split as to whether they are likely to charge more for dependents as a result of a provision that extends coverage to adult children up to age 26. Fiftyfive percent agreed it is likely or very likely that employees will have more out-of-pocket costs or reduce their health care usage due to a $2,500 cap on employees’ annual contributions to flexible spending accounts that goes into effect in 2013. There is no limit today, but employers typically impose limits between $4,000 and $5,000.

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Purpose of Wellness Programs

Corporate wellness programs are designed to nurture wellness in workers, regardless of the work environment. Corporate wellness programs are found in factories, corporate offices, large corporations, and small companies alike, according to WellnessProposals.com(6). Having an employee wellness program in place can boost morale, improve health and fitness and increase productivity in the workplace. If you are an employer who has taken the steps necessary to begin an employee wellness program, how do you get your workers interested and willing to participate? As an employer, offering a variety of wellness options is a good way to encourage employees to start a voluntary program with certain initiatives tied to specific goals. Here are a few questions to consider: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Do you offer employees physical activity options in the workplace? Do you promote a wellness culture in the workplace? What services are considered part of your overall wellness plan? Are there measurable outcomes related to workplace wellness? Have you increased healthy eating options at the worksite? Is a qualified EAP part of your strategy for mental wellness and counseling? Are there certified coaches engaged with your employees as part of their plan? Do you have a long term strategy to encourage total employee participation? What are the cost factors for the overall plan design, and what is the cost share per employee? Should you use an outside vendor to manage your wellness program?

The success of any company depends very heavily on the productivity and work performance of its human resources, according to WellnessQuotes.com(7). Wellness programs focus on the physical well being of employees, looking after medical requirements and ensuring personal health is a priority. Many programs offer weight loss regimes, smoking cessation programs, stress management and exercise, diet and fitness advice. Some go further with offering some more exotic items such as cafeterias that serve only healthy foods, campus bicycles, on-site classes for yoga and martial arts, and more. Here are ten reasons why having an employee wellness program makes sense: 5


1. Decreased Health Care Costs — The implementation of wellness programs has proven effective in reducing company health care costs. The concept of a wellness program was introduced initially for dual purposes. Rising health costs meant employers were looking for a way to minimize the expense whilst maintaining healthy human resources. The inception of wellness programs provided an effective solution. Wellness programs significantly reduce the high company cost of employee health care. 2. Work Place Morale — Wellness programs cover a broad range of healthcare initiatives. From nutritional advice to exercise programs and medical cover these programs look after diverse employee needs. The effectiveness of a wellness program in terms of the office environment is simple. Employees are healthy therefore on the whole a lot happier; this equates to maximized performance. They are also aware that the company is taking measures to ensure their health and wellbeing. 3. Reduced Absenteeism — There are many factors that influence a person’s health and well being. These could be minor infliction such as a cold or flu or major such as heart problems or obesity. Any of these could result in the employee taking time off work. The benefit of a Wellness Program is that this time will be significantly reduced, if not avoided all together. There are many small changes in lifestyle that can influence overall health and wellbeing. A wellness program identifies these, educates and implements them. Through education, training and professional health care a wellness program can greatly reduce absenteeism. For your company this is the bottom line, reduced absenteeism equals a reduction in costs and an increase in productivity—less sick time means more is accomplished by employees. 4. Reduced Overall Costs — Employee wellness programs have a range of benefits for employers. Both quantifiable figures and intangible results highlight these. For the company as a whole one of the most significant benefits is the reduction in overall company costs. It is hard to quantify what you gain via increased morale, productivity and work performance however the reduced sick leave, absenteeism and lower health costs contribute to a sizable reduction in overall costs. Employers and employees both gain profitability. 5. Increased Productivity — The main aim of an employee wellness program is to encourage employees to lead healthier lifestyles. This is affected through education, incentives and health care directed by the company and the wellness program. It is proven that when employees are healthy they are more productive — being healthy increases concentration, energy levels and output. It also ensures employees are able to consistently perform at the desired level. Increased productivity in the work place is a by-product of the success of wellness programs. 6. Increased Responsibility — An employee wellness program indicates to employees that the company cares about their well being. While it is common knowledge that these programs benefit employers, the benefits are mutual. A well taken care of employee feels an affiliation with the company, and they develop a level of responsibility associated with their work. This type of attitude within the work place is invaluable. An employee who feels like the company takes in interest in their wellbeing and health will take an interest in performing to the best of their ability, and perform better with improved results. 7. Increased Company Loyalty — Increased employee loyalty is another significant selling point for employee wellness programs. This is one of those intangible benefits that you really can’t put a price on. Company loyalty means reduced costs in terms of recruitment and turnover. This also makes for a more harmonious working environment, and employees get along with each other in an improved work space. 8. Reduced Sick Leave — Wellness programs have had a lasting impact on the cost of sick leave. Through education, training regimes and lifestyle management these types of programs have considerably reduced the cost of sick leave. Less time off means greater opportunity for improved performance. 9. Improved Work Performance — Promoting healthy lifestyle choices can reduce the amount of medical attention required. Lower medical costs are just the tip of the iceberg. Employees who participate in these programs have noted a substantial improvement in work performance. 10. Decreased Health Insurance Costs — Health insurance premiums are rising exponentially every year. The cost is rapidly rising to the point where employers have to find new ways to reduce their health expenses. Wellness programs have shown incredible returns and remarkable results. Health costs for those companies using employee wellness programs are significantly reduced.

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Programs

The International Association for Worksite Health Promotion(8) reports that a workplace ecology in which the dynamic relationship between human beings and their work environment nurtures personal and organizational values that support the achievement of a person’s best self while generating exceptional business performance improves the overall atmosphere of the company, the health of the employees, and the financial strength of all the stakeholders. A culture of health shares common themes including the following: management support, commitment and leadership; motivational programs and environmental influences that help employees sustain behavioral changes; policies, procedures, and benefits that support employee health; two-way communication between the employer and employee; outcomes measurement (i.e. health risk factor reduction); and health improvement. Examples are encouraging people to take a walk during the day or starting meetings with a health or safety tip. Companies committed to health as a business imperative achieve significantly better financial outcomes and lower employee turnover. Those are outcomes that any organization would be happy to achieve. Company wellness programs, according to the Dallas Business Journal(9), should be a lot like personal exercise programs: You start with a plan. You start slowly. It doesn’t have to be expensive to be effective. And it should pay off in the end. Companies need to start wellness programs as soon as possible, even if that means they’re not perfectly mapped out. Simple steps include removing smoking areas, encouraging employees to use the stairs, or starting a weight-loss challenge in which the winner gets a day off. HIPAA makes some exceptions for wellness programs, but does not allow employers to tie certain health-related outcomes to their wellness programs. That means employers are better off asking employees to attend a smoking cessation program rather than requiring them to quit smoking, and better off asking employees to walk 20 minutes three times a week rather than requiring them to achieve a certain body-mass index. Another law, the Genetic Information Nondiscrimination Act of 2008, prevents wellness programs from giving employees rewards for completing a health risk assessment that contains questions about genetic information, including family medical information. Employers are making headway in using wellness plans to create healthier workforces, and that leads to lower costs, according to Kiplinger.com(10). The most successful employers use significant incentives, such as lower health insurance premiums or cash rewards, to spur exercising and healthful eating. Many companies also offer on-site fitness centers and healthy dinners to go, as well as outreach programs to family members. All agree that visible participation by company leadership and strong communication about what wellness programs offer are vital to success. According to WellnessProposals.com(11), company wellness programs are a long-term investment. But how long should you wait for results? Finance and the Chief Executive Officer (CEO) want hard numbers to show return on investment (ROI). And wellness ROI is tougher to calculate than other types of financial investment, say, a 401(k). Workplace wellness programs come in all shapes and sizes. How does a worksite wellness program affect a company? Worksite wellness programs undoubtedly benefit both the corporations and staff members. Numerous studies have found a direct link, showing that healthful staff members make happy staff members, hence increasing productivity in the workplace.

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Wellness programs are smart for employees and the bottom line, a new study shows. The return on investment is sometimes as high as six to one. To achieve those kinds of results, employers cannot merely offer workers a few passes to a fitness center and nutrition information in the cafeteria, reported in December 2010 by Harvard Business Review(12). The most successful wellness programs are supported by six essential pillars: ƒƒ ƒƒ ƒƒ

Engaged leadership at multiple levels Internal and external partnerships A design that is broad in scope and high in relevance and quality

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Strategic alignment with the company’s identity and aspirations Effective communications Broad accessibility

Company initiatives to promote worker wellness — from on-site yoga classes to smoking cessation programs — are becoming more widespread as employers wrestle with soaring health care costs, according to the Pittsburgh Post-Gazette(13). Whether or not insurance plans help subsidize the costs, companies that invest in employee wellness should see a payoff, studies show. However, gym membership by themselves may not bring a huge financial return to employers. People who were going to join are joining anyway. If you’re not branding it as part of a broader wellness program, there’s no return on investment. It’s the creative incentives that could help employers realize more long-term savings. For instance, companies might offer the health club discount and $100 to employees who complete a biometrics screening and then consult with a health coach. Some provide insurance premium differentials to employees who don’t smoke. Make a decision now to improve your health and that of your workers. You will feel better today and tomorrow and the next day for actively moving towards wellness, according to Corporate Wellness Incentives(14). Here is a list of potential wellness programs that might be available to you at work, or should be offered by employers: ƒƒ ƒƒ ƒƒ ƒƒ ƒƒ ƒƒ ƒƒ ƒƒ ƒƒ ƒƒ ƒƒ ƒƒ ƒƒ

Ergonomic evaluations and training classes Prenatal education Stress management programs Massage therapy On-site primary health care services Smoking cessation programs Elder care resource and referral service Flu vaccination Health care consumerism programs Lifestyle coaching Holistic health education sessions Mobile mammography Lactation rooms and classes

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Quiet rooms for relaxation Fitness facilities Nutrition education Child care facility or resources and referral service Parenting classes Cholesterol, blood pressure and glucose screening programs Weight loss and weight management programs Employee assistance program Complementary alternative medicine — Yoga, Tai Chi, Diet education, etc

Employers can find these types of offerings in some insurance programs as riders or add-ons to their plan design. The costs can be shared by employees interested in an opt-in or payroll deduction mechanism. However, with new federal health care legislation that was passed this year, the costs of the health care reform law make it more important than ever that employers keep their workers healthy and motivated to adopt healthy lifestyles, according to BusinessInsurance.com(15). Effective Jan. 1, 2014, employers will be able to use employee wellness program rewards or penalties of up to 30% of the cost of individual health coverage, up from the current limit of 20%. In a survey taken by Chicago-based Midwest Business Group on Health, most employers also said they are likely or very likely to create or expand corporate wellness programs as a result of an incentive provision in the new law. Sixty percent of employers are likely or very likely to create or expand their wellness programs as a result of the wellness provision.

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Costs

Corporate wellness is not a program – it’s a culture. In order to be an employer of choice you need to make a company-wide commitment to be the very best employer possible. If your senior management sincerely embraces this endeavor and maintains open dialogue with employees, you don’t need fancy, branded programs with clever marketing. Corporate wellness becomes part of the company’s culture, according to BusinessWeek.com(16). By providing the very best wellness and other healthcare benefits, opportunities and resources, then in return, employees are happy, healthy, and provide the very best work and results for the company. Listening to employees also makes a big difference. As a result of direct feedback employers receive from employees, businesses are able to provide benefits that work and make a difference in the lives of workers and in the life of the company. Taking a holistic approach to wellness ensures your plan succeeds. Your goal is to be the employer of choice not only for employees but also potential candidates. Wellness can come in a variety of programs designed specifically for certain employers or on an a la carte basis with employees choosing from a system platform of services that is created for them by their company. There are other options that can be instituted to help workers that are low or zero cost preventive measures, such as breast cancer awareness seminars to health fairs where routine lab and health checks are given at a reasonable cost. Employees are able to catch something early because of the wellness checks companies can organize; workers have caught rising cholesterol levels, thyroid or weight issues and have been able to have those addressed early on, before it gets out of hand when these programs are in place. Some wellness benefits include ergonomic assessments, which have nearly eliminated onthe-job injury associated with repetitive motion, poor posture, and incorrect usage of equipment. This assessment looks at the employees’ work spaces and addresses things like using equipment improperly, holding a telephone the wrong way, or having your work area set up so that you twist your body in a weird way when you have to get something. They even check the computer monitor and make sure it‘s set up properly to avoid strain. Employers are emerging from the healthcare crisis as healthcare costs continue to rise and employees become unhealthier and lead unhealthy lifestyles that result in the development of more serious health conditions. Wellness on a corporate scale is one of the high hopes for the healthcare industry in lowering costs and making health insurance more affordable.  Employees and their families need to become engaged in their health and learn to live healthy lifestyles every day. Engaging in healthy behavior is one of the only chances of reducing the serious health conditions that will develop later in life, according to CorporateWellnessMagazine.com(17). Some wellness plans will be voluntary and some will not depending upon the employer. Signing up for one as an employee may be the best option to help improve and monitor your personal health care situation when the program is offered on a voluntary basis. Companies who promote wellness initiatives are providing a great way for their employees to cut down on the amount of time off due to illness and increase personal and business productivity and profit. For small businesses, the cost of wellness services can be more than their bottom line can handle. Another option can be to offer employees the ability to access wellness services through independent market channels if the employer does not want to administer a plan through the company. Portability of the plan is also a big question if the employee leaves or gets laid off from the job. Individual health insurance including wellness modules can be too expensive in that case. However, the need to stay healthy does not disappear. 9


Messaging to increase involvement Employees must buy into wellness programs in order for the plans to be effective in the workplace and at home. Just offering services usually does not motivate most employees to participate, even if they understand the benefits of becoming healthier. Often, unless incentives are used as part of the plan design, many employees ignore the messaging as too generic or not specific enough to engage them to take action. Even then, your message to improve participation should be clear and consistent. According to HR Morning.com(18), here are a few tips to grab attention and boost health and wellness program participation: 1. Tell employees exactly what they need to do — Many wellness programs only offer broad calls to action — like “Get your flu shot.” To increase participation, employers need to make wellness and preventive activities more personal. A few suggestions: ƒƒ ƒƒ ƒƒ ƒƒ

Send employees reminders on (or near) their birthday: “Happy 40th birthday. It’s time to set up a colonoscopy, so you make it to 50.” Then send a follow up a week later. Provide the address and telephone number of a nearby in-network medical office that can provide the treatment. Tell employees why the appointment is needed and how long it will take. Studies have proven that the more specific you make the message, the greater the chance the employee will take action.

2. Make it hassle free — The easier it is for employees to make appointments and keep track of what they should be doing, the more they’ll look after their own health. “Save the date” reminders work great at letting employees know what they should be doing — and when. Response cards/e-mails take things a step further and actually get employees to make appointments. An easy way to spark action: Send an e-mail to employees reminding them they need to make an appointment to get a flu shot. Then ask them to reply with the nearest date and time they’re available. Tip: When mailing response cards or reminders, send them home where spouses might see them and put the pressure on employees to make appointments. 3. Track and refine message results — Which wellness e-mails are getting opened the most? Which mailers have generated the most response? Analyze which communications are working — and why. Ask employees what they like best — or want more of. If nobody’s opening your e-mails, tinker with the subject line. If your mailers are getting tossed, try adding an incentive offer on the envelope, like “Participation will lower your insurance premiums.” Additional solutions to make wellness work beyond the workplace include involving dependents. When the family participates as a unit, employees are more likely to become healthier. According to Human Resource Executive Magazine(19), organizations can take a number of actions to engage employees’ dependents in their health-and-wellness initiatives. Perhaps the most important is to include dependents in the various offerings designed to support the five dimensions of health — physical, intellectual, social, emotional and spiritual. Enabling employees and their dependents to optimize their health and wellness requires wellcrafted, targeted communications designed to reach dependents as well as the employees. These communications need to educate and motivate dependents to take action and change lifestyle behaviors. To encourage family participation, communications should be distributed to the homes as well as to the workplace. Good nutrition, weight control, smoking cessation and exercising can be accomplished by positively reinforcing the healthy actions of each family member. Education about organization-provided tools and events can help a family plan for the best way to get and stay healthy. 10


Key points to consider include: ƒƒ

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Brand the program. Create a look and name for the organization’s program that becomes an immediate “good health” identifier for employees and their families. Use the brand on all print and web communications to build recognition and to reinforce the program’s message. Work with vendors to have the brand placed on all their materials as well. Personalize communications. Targeted, personalized messages will help employees and their families understand and appreciate the organization’s health-and-wellness initiatives and answer the question, “What’s in it for me?” With wellness, the message needs to be targeted to each individual based on his or her health risk/conditions, life stage and/or life event being faced — recognizing that each individual may be in a different stage of readiness to change. Solicit testimonials from the actual experiences of employees and their families. Nothing influences change as much as peer experiences. Get a few families who are willing to share their experiences to serve as “beta sites.” Communicate and explain all changes. Organizations must be willing to communicate any changes in their health-and-wellness offerings — both positive and negative — and prompt the employees to take action, rather than just inform. Honest, clear and consistent communications will help maintain leadership’s credibility and build confidence. Communicate from the top to build confidence. The best leaders share their vision, mission and strategies, knowing that employees and their families look to the organization’s leadership for information. It helps if the vision and mission of the health initiatives visibly support and align with the external business strategy. Imagine the impact of a picture of the CEO at the health screening, having his or her blood pressure taken, or the HR leader stepping on the scale during a company-sponsored WeightWatchers® meeting. Track results. Set up measurements against the objectives stated in the organization’s strategic communications plan. Build in evaluation milestones that gauge the effectiveness of the communications and identify opportunities for future improvements. Good employee communications can foster partnership, acceptance and trust that the organization has the best interest of its employees at heart. Current and clear communications about the health benefits, wellness programs, confidentiality of the process and updates on what is what in the media, especially in this age of healthcare reform, can go a long way to keeping up the momentum of the organization’s wellness program. Integrate program communications with the National Health Calendar and other health information. Create a link on the company’s Web site. Or create a separate health-and-wellness site to provide easy access to a variety of health-information sites, including those of the organization’s health-insurance carrier. Involve managers and supervisors in the communications process. As credible and accessible spokespeople, managers and supervisors should be included in the communications planning process. They should participate in developing the messages and be trained in the proper delivery of messages to employees. Be direct, clear and consistent. Ongoing communications should be simple, straightforward, factbased and consistent to maintain clarity and avoid confusion. Communicate regularly. Reinforcement of key messages will help to make good health and wellness a habit. Monthly newsletters, frequent Web site updates, e-mail blasts and periodic face-to-face meetings and events help to keep an organization’s program in front of its employees and their families. Promote the return on investment of all health-and-wellness initiatives. Get and provide feedback on all of the organization’s programs. Online pulse surveys, testimonials and case studies, utilization numbers, lower premiums all point to the success of the organization’s programs and create further incentive to continue on the road to good health. Companies that take steps to fully involve employees’ spouses and other dependents in their health-and-wellness initiatives will be rewarded with a healthier, more engaged and productive workplace. The net result will be improved health, productivity and cost savings for all.

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Enabling employees and their dependents to optimize their health and wellness requires wellcrafted, targeted communications designed to reach dependents as well as the employees.

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Evaluation and Metrics

Most companies are using biometric screenings as their key tool for measuring health, on the assumption that it accurately measures the kind of health that matters most, according to Benefit News. Think again. When it comes to measuring health, there are many options from which an employer can choose. They range from measures of how often health fails (mortality rates, disability, absenteeism and hospital admission rates), to how expensively it fails (insurance premiums and claim severity statistics), to how likely it is to fail in future (health risk factors such as body mass index, cholesterol and blood pressure) and finally to how people feel about their own health (health risk assessments), according to Employee Benefit News(20). What all these measures have in common is that they predominantly measure the negative side of health failures and risks - and are not sensitive to differences on the positive side of health. For example, biometric screening results might be the same for two people, showing no current health risks for either. However, one person could simply be riding their luck while they continue to eat poorly and not exercise, while the other person could be exercising every day and eating well. Yet, these two people could show up as equivalent in the data derived from a biometric screening. Having health risks and being sick at work reduce one’s productivity, a phenomenon called Presenteeism. The reality, though, is that the negative impact on productivity that results from health risks is often smaller than the positive impact that results from practicing healthy habits every day. If companies are investing in employee health because they are interested in the total productivity gains that come from employees living healthier lifestyles, then measures of health failures are sufficient. It’s like measuring how a new smart phone performs by only looking at how often the battery fails and how likely it is to malfunction in the future, rather than considering what the phone can actually do. Smoking costs employers anywhere from $1,500 to $5,000 per smoker per year in lost productivity and extra health care costs. Exercising for half an hour every day increases stamina and productivity by 100% during the last two hours of each day, according to NASA. Assuming an average salary of $50,000 per year, this suggests that the positive payoff from daily exercise for every employee, every day, would boost productivity 10 times more than getting all smokers to quit. This doesn’t mean that trying to get smokers to quit is a bad idea, it just illustrates that the payoff from exercise, measured in terms of increased productivity, is greater. The types of health measures that most strongly predict productivity are not the ones being used today in most companies. The best measure of overall health (for employers who want a return on their investment) considers the question of what type of health matters most to drive productivity. For nurses, this might be upper body strength (as this predicts, to a degree, how long they can work at patients’ bedsides). However, for any work that requires your brain (and few jobs don’t) the most important measure of health is a person’s fitness level. This is because fitness drives brain performance, not just musculoskeletal performance. Fitness can be measured using a simple, three-minute step test or in many other ways. Fitness testing is almost never included in a biometric screening but should be, because a change in fitness level drives greater improvements in performance than a reduction in risk factors. The best news is that since many risk factors can be improved by exercise anyway, there is a payoff in this area also, according to Employee Benefit News.

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According to PwC’s 2011 Health and Well-being Touchstone Survey of Employers(21) ƒƒ ƒƒ ƒƒ ƒƒ ƒƒ

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73% of all survey participants and 88% of large employers (>5,000 lives) offer wellness programs to eligible individuals 59% spend more than 1% of total medical costs on wellness programs The most prevalent use of incentives in 2011 was for the Health Risk Questionnaire (62%) and Biometric testing (56%), up from 57% and 46%, respectively, in 2008 Participation in wellness programs is higher in programs using incentives àà Health Risk Questionnaire: 48% participation with incentives, 28% participation without àà Biometric: 49% participation with incentives, 29% participation without Incentives offered: àà Cash or gift cards in the amounts of $50 – $299 àà Annual premium incentives in amounts of $50 – $500 àà Gifts and/or raffles for large gifts were generally not offered as incentives 54% of employers use their medical vendors for their wellness program

Most employers that have begun the programs — offering financial carrots or sticks to encourage employees to exercise, eat healthier diets and do preventive health screening to catch problems before they become major — agree on this: It’s hard to measure something that hasn’t happened. Trying to measure cost avoidance is hard. In some cases, it’s not what companies saved, it’s what costs they didn’t incur, according to the Kansas City Star News and Mercer(22). In a business world focused on quantifiable returns on investment, it’s still hard to convince many employers that employee wellness programs are worth the cost, especially when startup costs exceed measurable savings at the outset. There’s rarely anything harder than getting someone to change behavior — unless there’s a solid answer to the “What’s in it for me?” question. That’s why most employers who launch successful preventive programs have found they need to appeal to employees’ emotions as well as pocketbooks. Increasingly, those who study wellness say the difference is “social connectivity.” Social connectivity can occur in many ways — though team challenges to walk miles or lose weight, through corporate donations to charity if employee weight-loss goals are met, or if top corporate officers are out-front cheerleaders and participants in the programs. Even the best-laid wellness plans may still encounter some resistance. For instance, some employers trying to help control health care costs by improving the diet of their employees have found that it’s tough going. In corporate cafeterias where healthy food is subsidized, sources said some workplaces are throwing away more of the good stuff, uneaten because employees continue to choose chicken fingers, burgers and other fried foods. And, managers report, it’s not easy to simply remove the less healthy items. Employees may complain so much that it becomes a morale issue, or they stop patronizing the company food service and go “off campus” for lunch. One perceived resistance that hasn’t actually amounted to much was employee fear of “big brother” employers peering too deeply into personal health. That’s because most programs have done a good job of helping employees understand that their health screening information — often the kickoff part of the strategy — is handled by a third-party vendor or separate company. The company gets only aggregate information about, say, the medical expenses of its smokers, to help shape its strategy. It doesn’t get specific information about individuals. There always are some employees who don’t want the employer involved in their health in any way. But if key managers support it, it’s fun, and it’s collective, most employees will support the idea that they’re accountable for results.… It all comes down to money and competitiveness. Researchers also encourage employers to offer standing work stations, to redesign offices to encourage walking, to encourage faceto-face contact rather than e-mail, and to subsidize gym memberships and public transportation use. 14


A national snapshot: ƒƒTwo-thirds of organizations have some kind of wellness strategy. ƒƒEmployers spend anywhere from $10 to $3,000 a year per employee on incentives. ƒƒAsking employees to fill out health-risk assessments is the most common incentive. ƒƒAmong organizations with programs, two-thirds don’t measure outcomes to justify costs. ƒƒAmong organizations that have no program, one-fourth say it’s not an employer’s role.

Where the health care dollars go:

ƒƒ15% of the population drives 85 percent of the cost. ƒƒ5% of the population drives 60 percent of the cost. ƒƒ25% of the population has no claims costs — which doesn’t necessarily mean they’re healthy. It could mean they’re not getting cost-effective preventive care.

With health care costs accounting for an increasingly larger portion of business expenses, many firms are finding that wellness programs can help drive down health care spending, according to ThomasNet News and Aon Hewitt(23). Employer-based health care expenses have been on the rise for decades and account for an increasingly larger portion of private-sector spending. However, new research shows that company-sponsored wellness programs and health incentives often lead to lower health care costs, meaning that an investment in employee well-being can result in significant long-term savings — companies willing to spend on wellness programs for their employees can ultimately reduce their expenditures. Moreover, participants who show higher engagement in fitness activities also have a 16 percent decline in hospital admission and treatment costs. Research also suggests that introducing a corporate health and wellness program that educates, assists and motivates individuals to pursue healthier lifestyles leads to fewer and less costly medical claims. In fact, increasing gym visits by two per week reduced the probability of a hospital admission by 13 percent. This research provides compelling evidence that effectively designed incentive programs can motivate people to change their behaviors, leading to better health outcomes and lower health care costs over the long term. Both companies and health insurers have a vested interest in taking a proactive approach to wellness. In particular, the survey revealed that many companies offer disease management (70%), health and wellness improvement (64%) and behavioral health (60%) as key components to health care strategies. In an acknowledgement that more needs to happen to achieve success, many organizations are looking to expand efforts during the next three to five years and implement strategies that focus on total well being to improve physical and mental health (60%), absence management (53%), and integrated safety and health improvement efforts (50%). Companies, according to Aon Hewitt, currently offer incentives to employees for participation in key initiatives, such as biometric screenings (33%), health risk assessments (33%), wellness programs (31%) and tobacco cessation programs (27%). Conversely, some employers are imposing a penalty for nonparticipation in biometric screenings (5%), health risk assessments (5%), wellness programs (2%) and tobacco cessation programs (6%). Money serves as the primary incentive and penalty these employers use to promote employee participation in key programs, including health risk assessments (66% have a monetary incentive; 9% have a monetary penalty); biometric screenings (65% have a monetary incentive; 8% have a monetary penalty); disease/condition management (54% have a monetary incentive; 9% have a monetary penalty); and wellness programs (59% have a monetary incentive; 6% have a monetary penalty). 15


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Moreover, participants who show higher engagement in fitness activities also have a 16 percent decline in hospital admission and treatment costs.

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Penalties versus Incentives Wellness programs are “in” for employers – and so are penalties for workers who make unhealthy choices. Over the next three to five years, 73% of employers said they’ll offer a wellness program and tie incentives or penalties to it to motivate their employees to make healthy choices, according to a 2011 Aon Hewitt survey. Currently, the penalties appear to be getting a stronger foothold in companies’ wellness strategies. Reason: Many businesses have found in their wellness programs that people are more motivated by the risk of losing money than gaining it. How many companies operate under that belief? Here’s a rundown compiled by Aon Hewitt: ƒƒ ƒƒ ƒƒ ƒƒ ƒƒ

64% of employers impose or plan to impose penalties for smoking 50% for not taking part in disease management/lifestyle behavior programs 45% for not participating in biometric screenings 25% for not consulting with health coaches, and 17% for not making biometric improvements, like lowering blood pressure or losing a set amount of weight.

However, companies must be aware that when it comes to offering incentives or penalties, there are two things employers need to remember to avoid breaking the law (25) : 1. The size of any incentives or penalties in a wellness program can’t exceed 20% of the total cost of health coverage for employees (in 2014 that limit will be bumped up to 30%, thanks to the healthcare reform law). 2. If an employee is unable to earn an incentive — or avoid a penalty — due to a health condition, the wellness program must create an alternate way for that employee to do so.

Wellness programs not only improve an individual’s short-term and long-term health, but they also help curb absenteeism and presenteeism, improve productivity and aid quicker return to work for employees on disability leave. Companies also offer wellness programs to remain competitive in the marketplace and as a recruitment and retention benefit. When employees face the reality of either paying more money for their health care through higher premiums, or receiving rewards when they participate, the financial incentive (both negative and positive) to improve their overall health is strongly motivational. When companies want to engage employees in programs, they often will incentivize them to participate, according to BenefitsPro Magazine. Getting employees to be actively engaged in wellness has been a challenge to many organizations because the motivation to “jump into the pool” has been lacking on the part of workers in some instances. The age old question is “How do you get people involved?” (26) According to Business Review of Western Michigan, employers who for years have increasingly moved to high-deductible health plans and wellness initiatives to mitigate the ever-increasing cost of coverage are now beginning to elevate their approach to drive better results. Rather than offer incentives to employees to merely participate in wellness initiatives and set personal health goals, they are starting to base them on outcomes. There will be financial repercussions for not meeting goals. A growing number of employers in recent years have been offering financial incentives for employees to, for instance, stop smoking, lose weight or lower their cholesterol or participate in a disease-management program if they have a chronic medical condition such as diabetes or asthma. Incentives include items such as gift cards, extra time off and the employee paying a smaller share of the health premium.

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Agents say they are now seeing employers requiring employees to accomplish personal health goals to receive the incentives. Lower your cholesterol and reduce your risk for heart disease, for example, and you pay 20 percent of the premium, rather than the regular 30 percent. Fail to do so, and you don’t get that reward. The carrot is not working as well as the stick, and the stick is starting to come out in force now, according to Advantage Benefits Group in Grand Rapids. The emerging trend represents a natural evolution of sorts in employers using wellness to get health care costs under control. Companies are encouraging employees to take better care of their health, which results in reduced medical claims that drive up premiums. Employers that have had some success with wellness now seek to make further progress by adjusting how incentives are rewarded. It is an evolving process. Over time, employers have learned and are trying to improve how their plan operates. The push comes as employers face another year of higher premiums, according to Mercer. You’re going to feel more of the cost if you do not take more of a role in your overall health. Incentives and disincentives are tools that inspire employees to adopt healthier lifestyles. It is important to note that employers must be aware of HIPAA regulations as they relate to what incentives can and cannot be offered to workers, according to Meritain Health. Incentives may be offered for simple activities such as completing health risk assessments or participation in disease management programs. As more wellness programs emerge, the question becomes, which approach is most effective at inspiring behavior change; carrot or stick? Rather than molding an entire program to one extreme, understanding a company’s demographics is the best way to ensure ROI on a wellness program. Just as the rewards and punishments offered through a wellness program are adjusted based on the population’s demographics, the balance between incentives and disincentives must also be adjusted accordingly. One size does not fit all when developing a wellness plan, and customization is key. Rewarding a job well done is proven to encourage positive behaviors and motivate behavior change. Likewise, punishing unfavorable behaviors also has an effect on one’s actions and can encourage behavior change as well. Much of how employers approach this balance between reward and punishment is decided by the type of behaviors they are trying to address. The more acute the condition or risk factors, typically the more resistant the participant can be to participation in a wellness program. With this in mind, each tool has its place, and one may prove to be more effective when addressing a specific aspect of wellness. For example, an incentive may be the most practical and efficient way to initially get employees involved, as recent studies have shown that participation in wellness management exceeds 50 percent when tied to just a $25 incentive. In other situations, incentives may be ineffective in motivating behavior change and disincentives may need to be employed.

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For example, one behavior that more and more employers are addressing through disincentives is smoking. In addition to smoking cessation programs, many workplaces are taking a more aggressive role in controlling costs. This may include temporarily increasing a smoker’s health care premiums until they overcome the habit. Having to pay more for your insurance premium is definitely an attention getter, especially if workers learn about the savings by employees who qualify for better rates simply from participation and positive results from a wellness plan. According to Corporate Wellness Insights, when employers use this “carrot method” of motivating workers to get healthy, it can improve office morale and give workers a deeper sense of job satisfaction. But what happens when employers start punishing employees for failing to meet wellness objectives? As wellness programs become stricter, driven by employer economics, and workers are evaluated on some level by adherence to a company-wide wellness program, there is considerably greater scrutiny of what constitutes appropriate employer conduct. For example, if an employee is let go or penalized for failing to reach a specific weight threshold, or is unsuccessful at quitting smoking, what rights does the employee have? This is an evolving area that pits company ROI against individual autonomy. How demanding can employers be when it comes to the health of their employees? What happens when the national battle to combat chronic disease and lower health care costs is prioritized over individual employee rights? Is an obese employee dispensable simply because he is obese? Can he – and more important, will he - claim disability (for example: underactive thyroid preventing weight loss is “not his fault”)? How public or subject to review can employees’ personal medical records become? If and when employees are discharged or penalized for failing to reach a threshold of “healthy” determined by the company, no doubt lawsuits will abound. Courts and government agencies will be confronting these issues in the coming years as an increasing number of companies invest in workplace wellness. So, employers must weigh the advantages or disadvantages. Do they carry a bigger stick, or offer a bigger carrot? People are often motivated by either financial loss or financial gain. Getting healthier in the interim is a side benefit of doing the right thing. Regardless of your decision on incentivizing your employees, remember that at the end of the day you still want your employees to enjoy their job and not seek another place to work because they don’t like or trust you anymore. Plus, your business suffers if former workers are bad mouthing you as a company that doesn’t respect its most valuable resource—its people. It’s tricky, but wellness improves your company culture and health.

Money Talks, Employees Listen Nationally, participation in work site wellness programs runs between 30 and 60 percent, according to the Cornerstone Group. But simply offering a wellness program does not guarantee happier, healthier employees. Companies need to drive participation, or they won’t get the desired results they need. Lack of involvement is the number one reason wellness initiatives fail, and a large percentage of workers eventually need to participate to make a difference in the bottom line of any organization. (27) Employers are getting more and more sophisticated with incentives, and Health Savings Accounts are a prime example. The key is to make the carrot enticing enough, and employers may be assisted by the PPACA. As part of health care reform, the law includes wellness initiatives. In 2014, employers will be allowed to offer up to a 30% differential for wellness participation. While critics claim it is punitive to charge higher premiums for those who do not participate to hit certain benchmarks, it is important to remember that wellness programs are offered on a voluntary basis, and it is legal.

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The Health Insurance Portability and Accountability Act (HIPAA) of 1996, which protects the privacy of employee health information, allows employers to establish premium discounts for workers who participate in health participation programs or achieve certain health targets. Employers must be certain to comply with five requirements for standards-based programs: ƒƒ The program incentive cannot exceed 20% of the cost of employeeonly coverage under the plan ƒƒ The program must be “reasonably designed” to promote health or prevent disease ƒƒ The program must give the employees to qualify for the incentive at least once on an annual basis ƒƒ The incentive must be available to all employees, and a “reasonable alternative standard” must be available to any individual for whom it is unreasonably difficult to meet the standard due to a medical condition or for whom it is medically unadvisable to attempt to meet the standard ƒƒ The plan must disclose in writing to employees that a reasonable alternative is available

Financial Wellness Initiative In addition to physical and mental wellness, financial wellness is a consideration that employees are concerned about and should be included as part of a comprehensive wellness program. When financial stress is part of an employee’s personal issues at home, they are often reflected in performance on the job. Bankruptcy, credit card bills, medical expenses, school tuition, living expenses, and more are problematic to many employees, especially if their paycheck does not allow much wiggle room for extra expenses and the ongoing increase in the cost of living. Workplace education can help employees address money challenges and create a sense of ‘financial wellness’, according to MetLife and Employee Benefit News. For many employees today, worries about their financial situation weigh more heavily than they have in the past. Concerns range from stretched family budgets to finding the resources to pay for their children’s college education or to care for aging parents. Many in the American workforce don’t have enough savings set aside for a sudden emergency let alone fund a comfortable retirement. In the widely used 401(k)s and other defined contribution plans, individuals in effect are their own portfolio managers. It’s no wonder that many employees throw up their hands when it comes to financial planning and stress mounts. A growing number of employers recognize the benefits of workplace wellness programs as a way to make their employees healthier and more productive. But far fewer have addressed the important role financial fitness plays in a comprehensive company wellness plan. There appears to be a strong linkage between health status, financial status and the ability to function well in the workplace, according to MetLife’s 9th annual Employee Benefits Trends Study. As much as employers have been focused on traditional health and wellness, there is compelling evidence that stress stemming from financial problems also contributes to health care costs, as well as to reduced productivity. Stress is associated with exacerbating and driving health problems, and financial stress is a prime cause of personal stress. The positive news is that more companies are beginning to understand that employees’ financial concerns can impair their ability to function. Nearly 80% of employers say that employees worried about personal financial problems are less productive at work. Meanwhile, 73% of employees are very interested in their employer providing programs to help them make decisions about their financial needs. Workplace financial education programs add to satisfaction with benefits and to increased employee loyalty. This is becoming increasingly important as employers seek to contain costs and to maximize the return on investment of their benefits programs. 20


Employees from all levels and backgrounds within an organization can profit from financial education. Certainly those in the pre-retirement years are prime candidates. But many younger workers are as keen to get financial guidance as are older workers, and setting financial goals earlier in life is a plus. In many cases, women have assumed a major role as financial decision-makers for the family. And executives and highly-compensated individuals comprise a group that can face complex issues involving investment needs and estate planning. A successful financial wellness program at work contains many elements and opportunities for learning, and it should feature: ƒƒ ƒƒ ƒƒ ƒƒ

Commitment from the top: Senior management support correlates with increased program participation. Educational workshops that address diverse needs: These tap benefits from learning in a group, such as shared insights and improved motivation. Action follow-throughs: Workshops are not just about acquiring knowledge, but learning how to act on that knowledge. A strong communications effort: Good communication is key to driving participation, and in turn achieving results.(28)

Shift from Health to Well-Being The way many companies approach wellness has unfortunately become like a game of “Whack-a-Mole” -- they implement a wellness incentive program to improve employee health, but meanwhile three other moles have popped up elsewhere in the forms of decreased morale, reduced productivity, and declined engagement. To avoid becoming caught in this endless cycle, companies should shift their focus from short term behavioral changes to addressing overall well-being. Well-being is not limited to just physical health and wellness. In fact, focusing on any one thing in isolation leads to frustration. According to recent research from the Gallup Organization, well-being is made up of five essential elements: ƒƒ ƒƒ ƒƒ ƒƒ ƒƒ

Career Well-being -- how one occupies their time or likes what they do every day. Social Well-being -- having strong relationships and love in one’s life. Financial Well-being -- effectively managing one’s economic life. Physical Well-being -- having good health and enough energy to accomplish things each day. Community Well-being -- having a sense of engagement with the area in which one lives.

How these elements interact determines overall well-being and quality of life. If an employer focuses too much in one area but ignores others, its wellness program is more likely to become unsustainable. Of all the elements, Gallup found career well-being to be the most important because it has the greatest impact. In fact, reduced career well-being and engagement has been linked to increased workplace injuries, declined mental health, and even increased cholesterol and triglyceride levels. If employees already do not trust management, do not have strong relationships with their coworkers, do not get to leverage their strengths, have too much on their plate, have had wages and benefits cut, or anything else that reduces engagement and career well-being, then implementing a wellness program that focuses on specific health behaviors will likely fail. Doctors already recognize the importance employee well-being. Consider these three questions: 1) Would you describe your work as monotonous? 2) How satisfied are you with your job? and 3) How tense or anxious have you been in the past week? Most people think these questions are assessing stress or job satisfaction. In fact, these questions are part of a comprehensive back pain assessment used by doctors in New Zealand to predict with 83 percent accuracy who will be out of work more than 30 days due to low back pain. Of course traditional medical questions are also part of the assessment, but job satisfaction and engagement play a significant role, according to RJF Agencies. 21


Shift from Participation to Engagement Most companies focus on behavior modification (e.g., smoking, physical activity, nutrition) and use incentives to get employees to comply with the desired behaviors. This is where organizations become stuck. They get participation but not engagement. The Gallup Organization defines engagement as people who work with passion and feel a profound connection to their company. As a result, they drive innovation and move the organization toward its goals and vision. Lack of engagement costs American businesses more than $370 billion per year in lost productivity and has been associated with increased injury rates, declining mental health, and decreased well-being. Even programs that achieve 80-90 percent participation results may not have engagement. When surveying or interviewing employees in these organizations, many will indicate they are simply “going through the motions” in order to get the incentive. Even worse, many will resent the program and feel they are forced to participate. Research shows engagement occurs when employees know what is expected of them, feel valued, are able to leverage their strengths, are cognitively stimulated, and have quality relationships at work. Moving beyond wellness programs to create a culture that fosters engagement will be more effective in the long run by improving overall well-being, safety, and the profitability of organizations.

What Really Motivates People?

Research consistently shows long-term change must come from within a person (i.e., intrinsic motivation). Change efforts based on extrinsic motivation (i.e., carrots and sticks) typically fail in the long run and can reduce intrinsic motivation. At best, the result is short-term behavior compliance. Behaviors are the observable acts based on a person’s thinking. Therefore, intrinsic motivation and effective change start from a shift in thinking. It is not really possible to motivate another person; the desire can only come from within a person. If employees do not feel valued, they will perceive any wellness program as a manipulation and will resist change.

Shift from “Fixing” to “Supporting”

Neuroscience research shows the brain is literally hard-wired to resist change. It behaves like a 2-year old and pushes back when told what to do. When an individual is pushed to change, the brain sends out powerful signals that something is wrong, and these signals readily overpower any rational thought. However, when people are supported and able work out their own solutions, the brain releases a rush of neurotransmitters like adrenaline. Companies are most successful when they support employees in working towards what matters to them by providing a culture and environment that supports all areas of well-being.

A Different and Effective Approach to Employee Wellness

Successful wellness programs are a natural extension of the company culture where employees truly feel valued and career well-being is high. Without a culture of mutual trust and respect, wellness programs and incentives are perceived as another way to manipulate employees. In fact, working to increase engagement does far more for well-being in the long term than implementing a weight management or smoking cessation program.

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Getting Started -- the Right Way

First, companies need to measure their culture to understand current employee attitudes and values along with their perceptions of leadership, support, and company norms. These underlying attitudes are like an elephant in the room; they exist whether they are measured or not. Ignoring them won’t make them go away. Instead, identifying them provides opportunity to improve. Any well-being initiative should be based on the unique needs and values of employees, not an idea another company had that was successful. Rather than implementing a “wellness program,” implement a new “well-being benefit” of employment that employees help to create. The benefit should be based off the culture survey and address all areas of well-being. Well-being teams or task forces should be created to ensure this is an employee-driven benefit, not a HR or leadership initiative to cut health care costs. The team should create a three to five year strategic plan to improve each area of well-being. Once the long-term vision for employee well-being is established, create a detailed operating plan for the next 12 months that will serve as a blueprint for where to start. For many companies, their well-being plan starts with the fundamentals of rebuilding trust, improving communication and other elements that will improve career well-being. When companies focus on all five elements of well-being and create a culture that honors the unique needs of their employees, they will have less of a need to use incentives. The improved culture will allow them to harness the intrinsic healthful desires of their employees to improve well-being. (29)

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Avoiding Mistakes Wellness programs work. But they can quickly turn into money pits if you make one of the classic mistakes, according to HRMorning.com. (30) Wellness Workdays, a corporate wellness program provider, recently published “Top Ten Wellness Program Mistakes,” which was published in Benefits Magazine. Here’s what they said are the biggest pitfalls in wellness programs today: 1. Being impatient. Companies typically won’t see a return on their investments for years. Don’t give up if you aren’t seeing savings right away. The goal for the first couple of years should be to ramp up employee participation (say to 25% by the end of year one and to 50% by the end of year two). In year three or four, you can start looking for savings. 2. Not collecting enough data. What activities would interest your employees most? What health risks are most prevalent among your employees? These are the things you need to find out. After that, it’s a matter of developing activities that interest employees and target those health risks. 3. Not setting health goals. Simply offering programs or setting up a gym does not make a wellness program. These are activities. A program encourages participants to reach goals/benchmarks. 4. Concentrating solely on the unhealthy. Of course, it’s essential to get your high-risk employees involved early. But don’t forget to keep your healthy employees … well, healthy. Otherwise you’ll see them slipping into your high-risk group. 5. Having too few options. The best way to maximize participation? Offer a variety of programs/activities — not just a gym and a walking program. Don’t forget about mental wellness. Classes on stress and financial management can also be a boon. 6. Not offering carrots. Many employees simply won’t participate if there’s no incentive in it for them. Better health is not an incentive that’ll grab their attention. 7. Pinching pennies. You can’t get something for nothing. 8. Failing to get support from upper management. This is one area where your leaders will have to lead. If upper management’s not involved, employees won’t take it seriously. 9. Not tracking results. There’s no way to tell whether a wellness program is having an impact if you’re not at least tracking participation. 10. Failing to re-evaluate. Once you’ve got a successful wellness program in place, you can’t just put it on autopilot. Employees’ needs and interests change. At least once a year, check to see if new health risks are popping up or if employees are becoming more/less interested in certain programs.

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Synopsis Regardless of your current offerings to employees, wellness should be a key element of any health benefits plan design you offer. To not do so is to ignore the detrimental overall effects that unhealthy employees have on your bottom line. Current studies show that wellness programs work and provide a good return on investment, especially when properly implemented and engaged by workers. When considering your investment in human capital, you cannot afford not to have a wellness program in place. Human capital refers to the stock of competence, knowledge and personality attributes embodied in the ability to perform labor so as to produce economic value, according to Paul Rauseo, Fox Business commentator. The success of a company depends very heavily on the productivity and work performance of its human capital, its people. The ability to function and perform at a high level consistently is greatly enhanced by employee wellness programs. Wellness programs focus on the physical well-being of employees, looking after medical requirements and ensuring personal health is a priority and, in return, higher productivity. According to Advanced Benefit Strategies of Virginia, as a result of the PPACA, there is increased interest in employee wellness programs by employers striving to lower the profit-suffocating cost of offering health insurance to their employees. Health reform has clarified the incentives, both positive and penal, that will be allowed by the Department of Labor. Surprisingly, there is wide latitude employers may use with incentives and penalties tied to wellness plan participation. There is mounting evidence that wellness programs can significantly lower health costs when implemented with proper incentives. Here are five reasons in synopsis: 1. Although definitive studies have been difficult to quantify in the past, evidence is currently emerging that strong incentive wellness programs can significantly lower employer health care costs. The key to success lies in getting the participation of all employees. Significant financial incentives such as a $500 cash incentive for completing an evaluation, or significantly lowering contributions for participants who meet certain goals, has proven to be cost effective. 2. Healthier employees are productive. With the recession still working itself out, employees are being asked to be more productive than ever, just as business owners must be more productive with the resources they have to stay competitive. Keeping your human resources (people) in top shape with preventive maintenance is a common sense way to gain an edge on the competition. 3. It´s been proven that employees utilize medical care more efficiently when they have “skin in the game.” In other words, people care more about making smart choices when they have a financial stake in the outcome. Wellness programs demonstrate to employees that the employer cares about their well being and that their actions have an impact on the company. The movement toward “consumer driven” health plans with higher deductibles that give employees a greater stake in their care are perfect partners for wellness programs. Employees easily see the advantage of becoming healthier and spending less on out-of-pocket costs. 4. This may seem to be common sense, but absenteeism and sick leave costs are significant, and improving the health of employees is proven to lower the rate of absenteeism. Wellness programs educate employees extensively on how to avoid illness and often provide personal health improvement strategies to engage employees on a specific level and reduce sick days for a large portion of the employee population. 5. Although difficult to put a price on, employers implementing wellness programs report a surge in employee morale and loyalty to the company. When employees feel their employer is truly interested in their best interest, they tend to be loyal, hard workers in return. Reduced turnover and recruiting costs are also part of this equation, as a happier workplace results in less turnover.

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Many companies that implement wellness tied to meaningful incentives are experiencing double digit decreases in health insurance costs and sick leave. Legal concerns about strong incentive-based wellness programs have been a deterrent to the adoption of programs by some companies. The Obama administration´s health reform guidance that permits and actually encourages tough requirements for wellness programs has reinvigorated the market for employer-sponsored wellness plans. Educating your employees on the validity and importance of wellness is critical to your overall business success. When focused on providing benefits that work, make sure you include a wellness platform that augments your major medical and ancillary benefits. (31)

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Regardless of your current offerings to employees, wellness should be a key element of any health benefits plan design you offer.

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Solutions

Employers are searching for ways to improve the bottom line for both corporate profit and healthy employees, realizing that these assets go hand in hand. Finding solutions that work and are affordable can be a challenge in a tight economy and a down business cycle. Careington International provides access to multiple solutions through a flexible platform including product aggregation, administration, and plan design options. As a nationwide DMPO (Discount Medical Plan Organization), Careington is licensed in all states to provides affordable wellness across a variety of disciplines to help make members whole in all life categories—physical, mental, social, and financial. Realizing the scope of wellness in America, Careington has partnered with vendors to offer “Best in Class” offerings to its clients. The company’s vetting and implementation process has created a portfolio of products which can be mixed and matched based upon individual client needs. Careington recognizes that a “cookie cutter” approach does not work in today’s business climate. With the numerous types of wellness services available in the market place, Careington has selected key partners who offer distinctive and credible ways to make employees healthier. Classic features of any wellness plan usually include diet and weight management, complementary alternative medicine and chiropractic services, fitness clubs, smoking cessation, and more. However, to round out the scope of a wellness plan that goes the extra mile, Careington brings additional resources beyond the traditional platform. Employees can have access to a variety of value added products within a group or suite of services bundled together for specific needs, including dental, EAP, mental health counseling, health coaching, financial wellness, interactive online health assessments and other ways to improve their overall health and well being. Careington’s Spectrus program provides organizations and companies ways to improve employee health, add to the overall improvement of the business, and challenge companies to increase profitability. Here is an overview of Spectrus, and how various products can be blended to create an effective wellness program.

Careington provides wellness solutions— “Promoting health and well being.” 27


The Complete Wellness Spectrum

Careington Wellness Health Risk Assessment Biometrics Health Coaching Fitness Nutrition Weight Management Substance Abuse

Life Services

Health Services

Legal Mental Health Counseling Debt Consolidation Financial Planning Child & Elder Care Student Financial Aid Pet Care Adoption Resources

Dental Vision Hearing Chiropractic TeleMedicine Health Advocacy Medical Bill Mediation

Rewards Travel Leisure Entertainment Shopping

For more information about how this program can help your organization or company to improve wellness options for your employees, contact Careington at 800-400-8789.

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Bibliography:

1. Web site: www.definitionofwellness.com 2. Web site: http://www.sbwi.org/employers.asp 3. Web site: http://www.wellnessproposals.com/wellness_articles/worksite_wellness_why_employers_ should_care_about_employee_health_and_wellness.htm 4. Web site: http://www.metlife.com/assets/institutional/services/insights-and-tools/ebts/EBTS-BrokerDiscussion-Guide.pdf 5. Web site: http://www.businessinsurance.com/article/20100523/ISSUE01/305239981 6. Web site: http://www.wellnessproposals.com/employee-wellness.html 7. Web site: http://wellnessquotes.com/top10-reasons-why-your-company-needs-an-employee-wellnessprogram.html 8. Web site: http://hr.blr.com/HR-news/Benefits-Leave/Employee-Wellness/Get-Employees-Engaged-inWellness-By-Creating-Stro/ 9. Web site: http://www.bizjournals.com/dallas/stories/2010/09/27/daily30.html 10. Web site: http://www.kiplinger.com/businessresource/forecast/archive/wellness-plans-what-actuallyworks.html 11. Web site: http://www.wellnessproposals.com/company-wellness-roi.html 12. Web site: https://www.pwc123.com/c/document_library/get_file?p_l_id=257995&groupId=206718&fold erId=288189&name=DLFE-8071.pdf 13. Web site: http://www.post-gazette.com/pg/08132/880660-28.stm 14. Web site: http://corporatewellnessincentives.com/creatinging-a-corporate-health-promotion-program/ 15. Web site: http://www.businessinsurance.com/article/20100523/ISSUE01/305239981 16. Web site: http://workplace-wellness-program.com/ 17. Web site: http://www.marketwire.com/press-release/Corporate-Wellness-Conference-EngagesEmployers-Raise-Bar-Corporate-Wellness-Programs-1288765.htm 18. Web site: http://www.hrmorning.com/3-ways-to-ramp-up-health-and-wellness-participation/ 19. Web site: http://www.hreonline.com/HRE/story.jsp?storyId=533337144 20. Web site: http://ebn.benefitnews.com/news/how-healthy-are-your-employees-2712590-1.html 21. Web site: http://www.pwc.com/en_US/us/hr-management/assets/PwC_2011_Health_and_Wellbeing_ Touchstone_Survey_Results.pdf 22. Web site: http://www.kansascity.com/2011/05/30/2915071/measuring-the-worth-of-preventive.html 23. Web site: http://news.thomasnet.com/IMT/archives/2011/06/how-wellness-incentives-can-help-reducebusiness-healthcare-costs.html 24. Web Site: http://www.insurancenetworking.com/news/health_insurance_wellness_programs_health_ care_aon_hewitt-28096-1.html 25. Web Site: http://www.hrmorning.com/use-of-wellness-penalties-growing-2-ways-to-keep%E2%80%90em-legal/ 26. Website: http://www.benefitspro.com/2011/10/24/wellness-carrot-vs-stick 27. Website: http://www.golocalprov.com/business/smart-benefits-wellness-programs-that-pay-off/ 28. Website: http://ebn.benefitnews.com/eletter/profile/15/1881.html?ET=ebnbenefitnews:e1881:#field2#a: &st=email 29. Website: http://www.inddist.com/Content.aspx?id=1764 30. Website: http://www.hrmorning.com/wellness-10-costliest-blunders/ 31. Website: http://www.benefitspro.com/2011/09/26/5-reasons-why-you-should-have-a-wellness-program

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About Careington International Corporation Established in 1979, Careington provides affordable solutions to more than eight million members. Dedicated to improving the health and well-being of individuals, Careington's solutions are designed to complement traditional health insurance and provide significant savings for under-insured or uninsured individuals. With our comprehensive discount solutions, we can easily assist consumers, employers, associations, affinity groups, TPAs and health plans. Careington discounts range from 5 to 60 percent, depending on the service and region. Although this is not insurance, Careington products and services provide an entirely new and creative way for assisting your clients as they continue to face the ever increasing cost of health care. By offering discount programs that include pre-negotiated discounts on dental and vision care, doctor and hospital visits, and prescriptions and many other health and lifestyle services, you can bring significant value and savings to your clients. In addition to our products and services, we provide all of the necessary support to operate the discount program. Careington provides complete "plug & play" administration, so you don't have to hire and train employees to run your program. We work with our clients to install a program that fits their unique needs and provides the most value. Our market is expanding as the cost of providing employee benefits becomes more cost prohibitive. Our products can be used immediately; anyone can join and everyone is accepted.

Traditional Markets We Serve ƒƒ ƒƒ ƒƒ ƒƒ ƒƒ

Health Plans Insurers Associations & Affinity Groups Financial Institutions–Banks, Credit Unions and card issuers Employer Groups

Special Markets We Serve ƒƒ ƒƒ ƒƒ ƒƒ ƒƒ ƒƒ ƒƒ ƒƒ ƒƒ ƒƒ

Small to medium sized businesses that don’t offer group benefits Self employed & business owners Part-time workers Middle income families Single parent families Senior citizens and retirees Consumer directed health plans/HSAs/FSAs Unions Fraternal Organizations Brokers and Agents

Careington—“Promoting health and well being.” 30


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Careington International Corporation 7400 Gaylord Parkway | Frisco, Texas 75034 Toll-free: 800-441-0380 ext. 2905 www.careington.com Wellness

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Wellness White Paper