As health care costs continue to increase, employers and employees are searching for ways to keep these costs under control and as manageable as possible. Preventive health and wellness benefits are designed to help maintain or improve employees' behavior to achieve better health and to reduce health risks. By warding off health problems or lowering their incidence among employees, organizations hope to save on long-term health costs.
Recent studies illustrate the current scope and impact of wellness programs in the United States. According to SHRM's 2022 Employee Benefits Survey, 41 percent of employers provide wellness resources and information.
By offering employees the means and the educational tools to take control of their wellness, employers promote a healthier, more productive work environment. A well-executed program can reduce health care costs, augment productivity and increase employee retention, providing further support for the correlation between personal health and job satisfaction.
Wellness benefits can take many forms, and they can be as simple or as complex as the employer desires.
Some wellness benefits help employees deal with preventable and chronic conditions such as obesity, high glucose and elevated cholesterol. Other wellness benefits are incentive programs designed to motivate employees to complete certain health and wellness activities such as annual health risk assessments, smoking cessation programs or weight loss programs.
Often employers offer preventive health and wellness information through varied channels, including wellness publications or health fairs, to help make employees aware of wellness issues and provide them with tools to live a healthy lifestyle. In addition to these common types of wellness benefits, employers may offer programs and activities such as a 24-hour nurse line, CPR and first-aid training, massage therapy services, or onsite nap rooms, sick rooms or medical clinics.
Before implementing a wellness program or initiative, an organization should carefully consider the possible costs, advantages, levels of employee participation and potential legal concerns. Some popular wellness activities include the following.
An easy way to begin a workplace wellness program is to host or participate in a vaccination clinic. Many employees already arrange for annual vaccinations on their own, but an employer's support for vaccinations can make it easier for employees to get them—and increase the numbers of employees who do. Such support can also help employees get used to the idea that the employer can have a beneficial role in their health maintenance.
Nutrition-oriented wellness efforts focus on matters such as obesity (which affects organ function and mobility), salt intake (which affects blood pressure) and carbohydrate intake (which affects diabetes).
Larger organizations with their own cafeterias can encourage healthy eating by designing various healthy menus. Smaller organizations can offer healthy foods at staff meetings in lieu of the standard fare of unhealthy snacks.
The Workforce Nutrition Alliance offers a nutrition education guidebook to assist employers in building nutrition education campaigns in their workplaces.
Another key component of wellness is regular physical exercise. Walking or other low-impact aerobic exercise programs can be organized at the worksite before and after work or during meal breaks or designated exercise breaks. These are low-cost alternatives to having an onsite health club or paying for memberships at a fitness center.
Onsite fitness centers can be an excellent employee benefit, but employers should be aware of the potential costs and the liability issues involved, including the following:
Consequently, paying for employee fitness club memberships may be a prudent alternative approach. There would be no liability on the organization's part, and employees would probably benefit from the availability of child care, a greater variety of aerobic programs and more flexible hours of operation.
Health screenings often measure blood pressure, total cholesterol, triglycerides, glucose, waist and hip size, weight, height, body fat percentage, and body mass index (BMI). A test of aerobic capacity is also a good indicator of a person's overall fitness. Employees can use their screening results to compare their health with averages for a larger population.
Screenings typically take 15 to 20 minutes and are done during work hours. In larger organizations, the employer's medical department can provide health screenings. Organizations that do not have medical facilities can arrange for screenings through their health care providers or through the proliferating number of companies in the wellness business.
Employees may have varied perceptions of health screening programs. Many employees view them as a free health benefit; other employees may see them as an intrusion into their private lives. An employer must ensure that health screenings do not violate the Health Insurance Portability and Accountability Act (HIPAA) or the Genetic Information Nondiscrimination Act (GINA).
Health risk assessments have become valuable tools for helping employees understand and start to manage their health. However, it can be challenging to persuade employees to fill out a risk assessment and, more important, to persuade them to use the resulting insights to become proactive about their health.
Popular incentives include cash, reductions in employee contributions to health insurance premiums and employer contributions to the employee's health savings account or flexible spending account. Other incentives range from T-shirts or hats to lower health care costs in the form of reductions in deductibles, co-payments and co-insurance.
A few employers make risk assessment participation a requirement for health care coverage eligibility, a strategy that creates its own legal risks. Employers that institute health risk assessments within their workforces must be mindful that the Americans with Disabilities Act (ADA) and GINA allow employers to offer voluntary wellness programs but prohibit them from requiring involuntary disclosure of disability-related information and genetic information.
Under the ADA, health- and disability-related inquiries and employee medical examinations must be completely voluntary, but employers can ask for medical information if they reasonably believe that employees will be unable to perform an essential function of the job because of a medical condition or will pose a direct threat to themselves or others because of the condition.
Obesity is a major wellness challenge in the U.S. workforce, contributing to a host of health problems. Managing obesity within the workforce can involve nutrition, exercise and mental health programs. Employers interested in sponsoring weight loss programs for employees have a variety of options, including the following:
Employer-sponsored weight loss initiatives may also include exercise programs, fitness centers, nutritional education and food options, and incentives for participating in a weight loss program.
Providing tobacco-cessation programs can improve employees' health and longevity while cutting health care expenditures and improving employers' bottom lines. Such programs can include the following:
Although stress at a certain level can be an effective motivator and may spur productivity, employer-sponsored stress reduction programs can help participants understand when their stress has become unhealthy and has affected aspects of their personal and professional lives. Given the potentially severe personal and financial costs of excess stress on employees, employers should consider increasing wellness program efforts in this area. Some common programs and practices include the following:
Financial wellness programs typically seek to improve employees "financial literacy" by addressing challenges such as creating and maintaining a household budget and taking steps to reduce long-term debt. Other frequently addressed topics include savings for milestone events such as buying a home or funding a college education.
Employers are increasingly relying on incentives to motivate employees to take part in wellness programs and to improve their health-related behaviors.
Employers use several different types of incentives to encourage employees to participate in health improvement programs. These include offering cash and gift cards and making additional contributions to health savings accounts. Also, some employers reduce their contributions to health plans if employees do not engage in any programs.
Many experts say health premium reductions are the most effective incentives for persuading employees to participate in wellness initiatives. Such discounts, which are becoming more popular with employers, may be offered to employees for getting an annual risk assessment, participating in a weight loss program or not using tobacco products.
Employers should make sure their wellness incentives are designed so they do not inadvertently lead to unhealthy behaviors. For example, a per-pound weight loss incentive with no limits may encourage unhealthy weight loss practices. Or an incentive for attending a fitness center that expires after one year may result in employees ending their regimens.
Employers have a great deal of latitude in designing employee wellness plans, and the list of options goes beyond those previously described.
Certain components of a wellness program are critical to its success. In addition to adopting a variety of proven wellness program management methods, organizations should take steps to increase employee participation and engagement in wellness programs and activities.
Effectively designed and managed wellness programs will not succeed without sufficiently high levels of employee participation and engagement to achieve program goals. See Employers Have a Role in Creating Health Equity.
A more customized approach to wellness program participation may increase participation levels. Best practices in this regard include the following:
Engagement in the wellness program context refers to employees' active involvement and commitment to personal wellness and to the organization's wellness programs.
Organizations that want to maximize wellness program engagement should be aware of the various influences and obstacles affecting engagement, such as the following:
Adhering to the following rules of engagement can help employers maximize the ROI on employee wellness program endeavors:
Numerous legal issues and compliance requirements are related to wellness programs. Federal laws that apply to the design and management of wellness programs include the following:
The Americans with Disabilities Act (ADA) and Genetic Information Nondiscrimination Act (GINA) generally prohibit employers from collecting employee health and genetic information. But both laws have an exception that permits the collection of such information as part of employer wellness plans, as long as an employee provides such information voluntarily. A wellness program is voluntary if employees are neither required to participate nor are penalized for abstaining.
In 2016, the EEOC issued a rule under the ADA and GINA stating that employers could implement penalties or rewards of up to 30 percent of the cost of employee-only health care coverage to encourage employees to disclose ADA- and GINA-protected information without causing the disclosure to be involuntary. The rule took effect Jan. 1, 2017.
However, AARP sued, contending that a 30 percent incentive or penalty made an employee's disclosure of ADA- and GINA-protected information involuntary. In the summer of 2017, a district court agreed with AARP and sent the regulations back to the EEOC for further revisions. In December 2017, the court then vacated the regulations, effective Jan. 1, 2019.
Therefore, until the EEOC released new proposed regulations, employers must work with their attorney to determine whether a monetary incentive (and how much) is right for their organization.
HIPAA prohibits group health plans from discriminating against individuals based on health-status factors. The law divides wellness programs into two general categories: participatory wellness programs and health-contingent wellness programs. In participatory programs, rewards are based only on an employee's involvement, and in health-contingent programs, incentives are attached to outcomes. See HIPAA and the Affordable Care Act Wellness Program Requirements.
Health-contingent wellness programs generally reward individuals who meet a specific standard related to their health. Examples of health-contingent wellness programs include programs that provide a reward to those who do not use or decrease their use of tobacco, or programs that reward those who achieve a health-related goal, such as a specified cholesterol level, weight or body mass index, as well as those who fail to meet such goals but take certain other healthy actions.
Participatory wellness programs are generally compliant with HIPAA so long as participation in the program is made available to all similarly situated individuals, regardless of health status. There is no limit on financial incentives for participatory wellness programs.
The Affordable Care Act requires that employees be offered a waiver or a "reasonable alternative standard" to earn the incentive if it is unreasonably difficult for them because of a medical condition or if it is medically inadvisable for them to satisfy a health standard during the incentive period. One way to design a reasonable alternative standard is to combine a points system with a menu of program options personalized to the participant's health needs and to offer the support of a health coach to guide participants through the process.
Regardless of the types of wellness program initiatives an organization decides to adopt, effective communication is key to gain the level of employee participation and engagement in the program necessary to reap expected benefits. Employers should use communication to create a social culture where being healthy is valued. This can be done in many ways using well-established techniques of marketing and changing behavior, such as the following:
Employers should discuss legal considerations in wellness program communication with an attorney. Considerations include the following:
Organizations should inform employees that they are protected under HIPAA and the ADA, which ensure that the medical information they voluntarily provide to HR will be kept private, and that if it is medically inadvisable or unreasonable for them to attempt any standard of the program, another method will be designed so the employee can earn an equivalent reward.
Applying metrics helps measure wellness program success. Employers should examine not only program participation but also the ROI that the organization sought in launching the program. Key questions that an organization may wish to ask itself in measuring program effectiveness include the following:
Employers should be prepared to wait three to five years to see the real ROI on wellness programs. Employers should also be cautious about implementing too many changes after they launch a wellness program because the more changes there are, the harder it will be to reliably measure ROI.
Traditional wellness programs rely on hard-copy handouts, instructor-led classes and coaching in person or by telephone. All are difficult to deliver when employees work at multiple sites, and they can be quite costly. Today, web-based solutions can deliver the same information to a limitless number of employees, 24 hours a day, from any location with Internet access and for a fraction of the cost.
Online solutions should be one part of a coordinated wellness program, not a substitute for offline wellness programs. Online wellness offerings vary widely, as do their costs. For example, online solutions can provide basic nutrition and support for physical activity. An open-access site can provide a forum for individuals and groups to set health goals, track progress and share experiences through bulletin board postings and blogs.
Employers can create private teams and invite employees to join by e-mail via a hyperlink. More sophisticated solutions include capabilities such as online health risk assessments; digital health coaching; disease management and support modules; and automated, personal medication, diet and exercise reminders. See Wellness Portals Help Fill Employee Need.