Corporate Wellness Program Proposal

For most firms, voluntary benefits are a win-win arrangement. But there could be hidden risks.

On the positive side, voluntary benefits cost businesss next to nothing, yet boost employees’ morale and benefits satisfaction.  An Aon survey found 77% of companies offer at least one voluntary benefit.

But what happens when there’s a legal dispute between one or more of your workforce and the vendor?

In many cases, employers unwittingly get dragged into court.  The provider may argue that the plan is covered by ERISA, and the employee’s lawsuit should instead be filed against his or her employer.

When the court agrees, the legal burden shifts.  Some courts have ruled that a voluntary benefits may  be covered under ERISA, even when it wasn’t an employer’s intention to formally “sponsor” the plan.

If push comes to shove, the vendors will protect themselves. In truth, some attorneys warn that a voluntary plan insurer’s first move if sued by one of your workforce are going to be to try to get the legal burden shifted from itself to you.

Two seemingly innocent things that can be turned against you in court -

o  The written announcement to tell workers about the new voluntary benefit, and

o  getting involved when there’s a dispute between an employee and the plan provider.

Be careful with announcements When you offer a new voluntary benefit, the natural tendency is to try to get staff members pumped up to participate. But you can get in trouble when individuals  get the impression the firm endorses the plan. Helpful practices -

o  Don’t put the announcement on organizational letterhead

o  Put a disclaimer on the description

o   either exclude your voluntary offerings from employees’ benefits manuals or list them separately, and

o  hold open enrollment at a different time than for ERISA plans (401(k), main health plan, etc.).

Moreover, if the provider offering the voluntary plan has competitors, you could want to remind employees the provider of the voluntary plan isn’t the only game in town. Some firms pass along lists of competing providers.

Prevent involvement in disputes as with your ERISA plans, chances are personnel will come to you when they have a problem with a voluntary plan. Your first inclination is to help.

But many specialists warn it’s better to stay out. Reason –  Courts see this as the action of a plan sponsor. But you can steer someone in the right direction (e.g., giving a contact name to call) while remaining neutral in the dispute.

Good intentions gone bad

From an ERISA standpoint, the most perilous voluntary plan design is one that is partially paid by the company, even if workers pay the bulk of the cost.

In a major ruling a few years ago (Burgess v. Cigna Life Insurance), a United States  district court ruled against an company with a voluntary supplemental disability plan in which the firm paid a portion of premiums on behalf of its lower-paid employees.

While most workforce paid the entire premium ?.” and firm made clear to individuals  the plan was a voluntary benefit ?.”the court said it didn’t matter.  The act of contributing to some employees’ premiums made it an ERISA plan.

In the last few years, “presenteeism” has become an even bigger concern for a lot of companys than absenteeism. Even though many HR/benefits managers hate the admittedly overused term, presenteeism is notwithstanding a real issue in nearly every worksite.

Most widely,  presenteeism takes the form of employees coming to work sick. They’re  unproductive and endanger peers. Meanwhile, the staff member isn’t forced to use a sick day. A bad deal for businesss all the way around.

A recent survey by LifeCare revealed that 93 percent of staff members (polled from 1,500 companies) admit that they at least ocassionally come to work when they’re sick enough to stay home. More important, the study  looked at the reasons why folks do it.

Troubling rationales

The No. 1 reason staff members cited for coming to work sick was a belief that they’d be “letting other individuals  down” when they call out. Almost 30% of respondents cited this as their main reason. Beyond that, the top responses were -

o  It’s too risky, due to office politics or culture, to take time off (26%)

o  The staff member is too busy at work to be able to stay home a day (15%)

o  The staff member saves up sick days for childcare/eldercare emergencies (12%), and

o  The staff member saves up sick days to use as additional vacation time (8%).

A lot of of these rationales are troubling to HR/benefits managers.

In the first place, supervisors who hassle employees about taking legitimate sick leave are, at best, being pennywise and poundfoolish.  Presenteeism costs more than absenteeism, once you figure in the uncharged sick days, lack of productivity and risk of other employees getting sick.

You have more power than you think to change your business culture if the “tough it out” mentality still applies to individuals  who come in sick. When upper management is confronted with the real dollars and cents of presenteeism, lowering the problem usually becomes a priority.  At the very least, firms shouldn’t invite it.

In terms of supervisor- and employee-education, repetition of the “stay home if you’re sick” message is the key. Eventually, it’ll sink in.

Of course, there’s still the problem ?.” as evidenced by the survey ?.” of staff who misuse their sick days by attempting to hoard them for other purposes.

Adopting PTO, no-fault absence policies or use-it-lose-it sick leave are the three most common ways of lowering the risk, but be aware that each of these policies have risks of their own.

At the end of the day, the more open the lines of communication are between upper-level management and employees, the less prevalent the presenteeism problem becomes.

In many segments of society, we  hear about racial and ethnic profiling in negative ways. But what about when it comes to health promotion programs?

When used for the specific purpose of beginning ?.” or evaluating  ?.” a wellness or disease management program, profiling isn’t just legal. It’s also encouraged.

Affects health risks

Different racial and ethnic groups tend to be more at risk ?.” for genetic and/or cultural reasons ?.” of certain health problems. Examples -

o  African-American, Latino, Native American and Pacific Islanders are  at higher risk of diabetes than Caucasian employees

o  Chinese women are statistically twice as likely to get cervical cancer

o  Caucasians have disproportionately high rates of obesity and high blood pressure, and

o  Latinos have higher rates of asthma and chronic obstructive pulmonary disease than other groups.  The HIV/AIDS population is also disproportionately Hispanic.

Bottom line –  By reviewing  the ethnic breakdown of your staff member population, you are able to set disease management (DM) program priorities with greater confidence and accuracy.

Health Care quality an issue

Several studies also show there’s an unfortunate relationship between ethnicity and quality of healthcare. A lot of times, minority workers receive inferior treatment and health education at the same facilities where others receive top-notch care.

This generally happens for innocent reasons. A common scenario –  a lack  of Spanish-speaking physicians in the network for your Latino workforce. But the result is generally higher healthcare costs for you and, often,  greater reluctance among minority workforce to seek needed treatments.

By profiling personnel against the physicians in the network, you ultimately help personnel get the care they need and the company to better control long-term costs.

Almost two-thirds of businesses with health promotion programs offer personnel incentives ?.” financial or otherwise ?.” to participate.

But only one firm in five has seen major improvement in employees’ health status (and lower costs) within two years of launching the incentive. Here are three keys to getting good results ?.” and a red flag for failure.

Cancer screenings pay off big

Most health promotion programs feature health-risk assessments for things like high cholesterol and diabetes. But many overlook the need for early detection of cancer, which may affect any staff member, regardless of his or her age or general health.

In many cases, you can line up certain screenings, like skin cancer detection (the most common kind of cancer and, in its early stages, the most easily treated) for free or at a nominal cost.

These resources are often available through community agencies or the American Cancer Society. More involved and costly screenings ?.” such as mammograms ?.” are well worth the cost.

A single case of cancer identified early usually saves thousands of dollars in medical claims and disability costs ?.” not to mention trauma for the employee.

Smart staff member health promotion incentives

Medical Insurance Portability and Accountability Act (HIPAA) has tricky non-discrimination rules for offering personnel a break on premiums or copays. You needn’t worry about HIPAA if you -

1. Structure the health promotion program as a cost-break for workers who embrace wellness. on the flip side, imposing surcharges for uncooperative workers can force you to jump through health insurance portability and accountability act (HIPAA) hoops.

2. Make the incentive available to all employees. for example, if you offer a discount to non-smokers, an staff member who lately quit use of tobacco must also be eligible.

3. Allow staff who fail to earn the incentive to have another shot at it next plan year.

Bottom line –  Make the financial incentive a reward, not a punishment. Do the incentives work? If they’re done right, yes.

Firms offering monetary rewards for wellness generally save about $20 to $50 a month, as reported by some estimates.

Making health promotion programs simple

A lot of firms require workers to work with a personal “health Coach” for earn premium discounts or other incentives. Generally, the worker sets up appointments and reports to the health coach on a regular basis, either by phone or in person.

The good news –  the early results are often stimulating.

The bad news –  Once personnel realize there’s ongoing effort involved, many lose interest. But many firms have found a simple alternative. Rather than having participants contact the health Coach, the health coach calls them.

In many cases, this minor health promotion program tweak keep folks on the right track and cuts dropout rates.

Health Promotion begins upstairs

No matter how much money your corporation spends on wellness, the odds of success depend largely on the example set by top management.

Example – If your CEO is a smoker, chances are few personnel will purchase into a smoking cessation program.

In like manner, it’s hard to sell workers on subsidized health club memberships if your organization culture is sedentary. for wellness to work, the top brass must practice what the firm preaches.

Are your health care programs delivering on your vendors’ promises?

Just as importantly, how can you hold providers accountable if you’re not getting what you paid for?

Here’s one proven way – Create a vendor scorecard. Scorecards alone won’t bring down your healthcare costs. But they’ll at least help be sure your company ?.” and personnel ?.” get everything you’re paying for.

The tool can help you measure plan performance with greater precision ?.” and identify specific areas that need improvement. Best of all, any company can adopt the technique to fit their needs. Here’s how it works.

1. Select specific rating areas

Benefit pros who’ve successfully adopted the scorecard system recommend grading vendors on five to 10 measurable areas, like -

o  Claims processing. Are employees’ medical claims turned around in a timely fashion? Are you hearing complaints that the explanations of benefits (EOBs) are slow to arrive or hard to understand?

o  Disputed and resolved claims. Do employee questions and complaints about denied or still-pending claims get answered rapidly and thoroughly? Exactly how often are you forced to go to bat for employees?

o  Accessibility. Are plan reps quick to answer phone calls? Do they attend regularly scheduled meetings?

o  Reports. Do you receive timely paid claim and utilization reports?

o  Open enrollment. Did you receive effective support preparing for and conducting open enrollment events?

o  Employee education. Do your workers find the written and/or one-on-one services provided through the plan helpful in answering questions about managing specific chronic conditions (like diabetes or depression)? Do you receive support in educating your workers to make healthy lifestyle options, like use of tobacco cessation?

2. Select a workable rating scale

There are two schools of thought when it comes to choosing  a rating method –  subjective or objective. A lot of benefit pros ?.” in particular those from smaller firms ?.” use a simple pass/fail or 1 to 5 score to rate their satisfaction.

Others create more elaborate, statistic-based ratings. One method –  take the provider’s guarantees (e.g., addressing disputed claims within 3-5 business days) and then measure by percentage how often these goals are met.

These rating data could be obtained through quarterly performance reports, employee surveys, issue and complaint files and, for larger plans, external audits.

3. Feedback causes improvement

It’s good practice to share your scorecard system with the provider before meeting to review the results. Reason –  This lets you iron out any provider questions about the review categories and scoring system.

Once that’s settled, you can meet to go over the numbers and prioritize the areas that need improvement. Many firms then add a new scorecard category ?.” providers’ followup.

At the end of the day, is it worthwhile to ban tobacco use on the premises at your business?

It depends on the steps you take to support staff members trying to kick the habit, finds a recent published study .  The Journal of Tobacco Policy and Research found that smokers do, indeed  take more sick days than their non-use of tobacco colleagues.

And even if the smoker is in relatively good overall health (i.e., isn’t obese, doesn’t have chronic medical conditions), he or she is still likely to have higher healthcare costs than a comparable non-smoker over the last three years.

Exactly how does a use of tobacco ban fit into the cost equation? When the smoker quits, health costs even out.

But if the individuals only refrains from tobacco use on the job ?.” but continues puffing away at home ?.” the employer sees little to no health cost decrease.  The research study  found similar patterns for absenteeism.

Bottom line –  A workplace use of tobacco ban in combo with a use of tobacco cessation program gets results. A use of tobacco ban alone ordinarily doesn’t.

In the last few years, there’s been a rising trend for public companys ?.” not just private organizations ?.” to ban use of tobacco. Here’s what your coworkers are doing.

What’s New in Benefits and Compensation lately surveyed 374 of our readers from both the private and public sectors to find out their organization’s policy on permitting personnel to smoke on-site and hiring smokers in the first place. Here’s what we found -

o  11 percent have created a policy of hiring only non-smokers

o  17 percent allow workforce to smoke offsite, but ban it on all company property

o  39% restrict use of tobacco to designated areas outside the building

o  30 percent allow smoking anywhere outside the building, and

o   3 percent allow use of tobacco in break rooms or other indoor areas.

Public businesss get aggressive

While much of the publicity about no-hire policies for smokers centers on private businesses, it’s actually public corporations in certain states that have been the most assertive of late.

For  instance, Florida is among the states at the forefront of the movement. Sarasota County recently became  the third Florida county to take a no-hire stance to control healthcare costs.

New hires must take a drug test that detects nicotine and sign a pledge certifying that they haven’t smoked in the past 12 months.

The ban won’t affect current staff, but the county has undertaken smoking cessation programs aimed at employees’ wallets.

Non-smokers pay less for coverage through various incentives and the county covers the cost of participating in smoking cessation programs.

The reason why Florida public businesss have the ability to take these steps –  the state supreme Supreme Court has ruled that refusing to hire smokers doesn’t break discrimination laws.

But your state laws may vary, so proceed with caution before considering similar policies.

Quitting smoking at any age can improve a person’s health.  And believe it or not, older workforce often fair better with smoking cessation than younger workers.

As reported by the Journal of American Medicine, Duke Univ. reseearchers tracked 573 older patients over 10 years. They found that just 16 percent of those who joined the tobacco use cessation program later returned to tobacco use.

Previous research has found young smokers who attempt to quit have a 35 percent to 45 percent relapse rate within two years.

Given that staff members nationwide are retiring later and the cost of retiree health care is sky high, you may want to keep attempting with tobacco use cessation programs, even for the oldest staff members on your health plan.

In this recession economy and out-of-control worker debt, many businesss who don’t have automatic 401(k) enrollment have seen participation drop.

Here is how one small company in Arizona cleverly tied 401(k) education to employees’ other financial concerns. Rather than simply holding its usual 401(k) open enrollment education meeting, it held a “financial wellness fair.”

Stressed 401(k) importance

Just how it worked –  on the same day the company’s 401(k) provider sent a plan rep to discuss the retirement plan, the organization also arranged for a licensed financial planner to talk to personnel.

The financial planner went first. She began the session by pointing out that she wasn’t affiliated in any way with the management of the 401(k) plan.

That was vital both for the company’s legal protection under ERISA and for building trust with staff. She then discussed why it’s vital for people  to take part in the 401(k) plan, and offered attendees budgeting tips and basic strategies for cutting their debt.

The financial planner’s talk cut to the heart of a few major issues that hurt both employee salary satisfaction and 401(k) participation. Numerous studies show that the No. 1 reason many individuals  avoid 401(k) participation is that they feel they can’t sacrifice any part of their entire paycheck and still survive financially.

The second part of the session was the standard 401(k) enrollment presentation from the provider. End result – Workers were more attentive and there was a noticeable uptick in both new 401(k) enrollments and salary contributions from already-enrolled workers.

The event was such a smash that the business plans to make the Financial Health Fair a regular part of 401(k) enrollment. While the financial planning advice is generic (the business may add third-party personal finance planning as a voluntary benefit in the future), it’s also timely.

The 401(k) signup appeal comes while the financial planning tips are still fresh in employees’ minds and they’re excited to do something to help themselves.

Looking for incentives to get overweight workers to purchase into a health promotion program? A recent study  suggests many workers are even willing to pay much ?.” or all ?.” of the cost themselves.

Roughly 35 percent of firms with health promotion programs focus on providing staff with convenient access to weight reduction resources.

A poll of 1,352 staff by the Strategies to Overcome and Avoid Obesity Alliance found that many individuals  would gladly chip in for the cost of the health promotion program when they believed it’d help them lose weight. What staff want -

o  confidential support and counseling

o  Access to a professional nutritionist or fitness trainer, and

o  onsite exercise programs.

Until recently, only large corporations were able offer such health promotion programs as part of their wellness benefits.   But the fastest growth of these health promotion programs in the last two years has been in smaller firms (sometimes with as few as 50 full-time employees).

The majority of firms split the cost with staff. Ordinarily, staff pay up to about 25% of the cost. But some plans are fully employee paid.