Are wellness programs on the decline? Do employees resent them, and do employers see their investments as a waste of time and resources? If you buy into some recently published articles, you might think the answer to all three questions is a resounding yes. Two of the most common reasons cited for the alleged decline are lack of results and legal concerns. Considering all the negative press lately, it might be helpful to take a deeper look at these claims.
Before we address the concerns being raised, let’s start with the numbers. Are wellness programs truly on the decline? According to a recent study by Fidelity Investments and the National Business Group on Health, approximately 44 percent of companies nationwide have an outcomes-based wellness program. This number represents 2 percent growth over the previous year – not huge growth, but certainly not a decline.
Next up: legal issues. Certainly, wellness programs are subject to regulation, but our experience is that these compliance considerations are imminently manageable. Notably, in passing the Affordable Care Act (ACA), Congress voiced its approval for wellness programs by increasing the maximum award many wellness programs can offer. What has struck fear in some employers is a series of lawsuits in which the Equal Employment Opportunity Commission (EEOC) claimed that certain wellness program designs violated the Americans with Disabilities Act (ADA). In other words, the EEOC claimed that an ACA-compliant wellness program could nonetheless violate the ADA. One court has already voiced its disapproval of the EEOC’s argument, but there are still ongoing cases against what appear to be more aggressively designed wellness programs.
Members of Congress, believing that their approval of wellness programs as voiced in the ACA was being usurped, challenged members of the EEOC to issue long-awaited regulations describing how wellness programs could comply with both the ACA and the ADA. The EEOC recently obliged. As discussed in our Alert, the EEOC’s attempt at a first draft creates a workable framework, thought it has yet to create the hoped for congruence between the ACA and ADA. Nevertheless, we are hopeful that the ongoing comment and revision process will result in a more employer-friendly second effort.
And perhaps most important all, let’s talk about results. At Lockton, we’ve seen employers pin financial hopes on wellness programs that focus primarily on rewarding employees for participation. Those organizations typically are disappointed when nothing changes. When we work with employers that are willing to implement a program with very specific goals, hold their employees accountable for establishing healthy behaviors, and measure the outcomes at regular intervals, that’s when we begin to see results.
Let me illustrate this point with the story of a Lockton client that created a program to focus on improved care compliance (a very specific goal), which led to reduced claims costs.
Challenge: Despite a wellness program that involved four different vendors, an employer in the automotive industry with 1,800 employees in multiple locations was concerned about a lack of care compliance in its employees with diabetes, along with rising healthcare costs.
Solution: Lockton led a strategic planning effort and helped the client set specific, measurable wellness goals. In addition, they helped the client by reviewing wellness vendor contracts and implementing performance guarantees.
Results: Eighteen months after implementing a Lockton Health Risk Solutions strategic plan, InfoLock* revealed:
- 31 percent reduction in number of noncompliant high risk employees.
- 74 percent compliance with physician visits for diabetic employees.
- 28 percent lower claims cost per employee per year for compliant high risk individuals vs. noncompliant high risk individuals.
I can understand why many employers are disillusioned with their wellness programs if all they’re doing is encouraging people to show up for a biometric screening or a lunch n’ learn. And I can see why some employees might resent what they perceive as an intrusion, if programs are not designed and implemented properly. But when an employer commits to collaboration with its employees to create a true culture of health, setting positive and realistic expectations for healthy behaviors, improvements are possible.
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*InfoLock is Lockton’s proprietary data mining warehouse.