U.S. Employers Turning to Wellness Programs

Nearly two-thirds of major companies with wellness programs said rising health care costs were "a major factor" in their decision to implement these programs, according to a survey by the Deloitte Center for Health Solutions and the ERISA Industry Committee (ERIC).

The survey of 365 large employers found that 62 percent of the companies had implemented wellness programs to improve employee health, while another 33 percent said they were considering such programs. Of the companies with programs, 64 percent said health care costs were a major factor in their decision, while 34 percent said high costs played some role. Only 5 percent of the companies said they neither have programs nor plan to have them, and 2 percent said rising health care costs played no role in adopting a program.

Employers were taking a variety of steps to manage rising health care costs, the survey found. Some 83 percent of the companies that responded said they have increased employees' contributions to their health coverage in the past year. Another 30 percent said they had introduced consumer-directed health options, such as flexible spending accounts, in the last year.

The vast majority of the companies with programs said they considered them long-term investments. When asked, "Do you believe that helping employees lead healthier lifestyles will make a noticeable difference to the company's health care costs?" some 80 percent answered, "Yes, but it will take a while to see results." Another 14 percent answered, "Possibly, but there are other reasons we wanted to do this." Only 4 percent said they expected "immediate improvement" while 2 percent said they expected no "measurable impact."

"Employers large and small see the potential in encouraging employees to lead healthier lifestyles by eating better, exercising more and not smoking," said Tommy G. Thompson, independent chairman of the Deloitte center and former secretary of health and human services.

Program Components

The most popular component of a wellness program offered was health risk assessments (61 percent), followed by smoking cessation programs (56 percent), on-site workout facilities (50 percent), adding healthier foods to menus in company cafeterias (48 percent) and employee diet groups (48 percent). Other program elements listed were subsidized gym programs (43 percent), allowing employees to use time during the work day to exercise (27 percent) and diet counseling (27 percent).

Nearly a third of the firms listed other elements such as free flu shots, healthier vending machine choices, wellness Web sites and on-site massage therapy.

Forty-seven percent of the companies with programs said they were offering employees incentives to participate. The companies offered cash payments (29 percent), reduced medical co-pay costs (15 percent) and rebate of program costs (30 percent), as well as other incentives such as free membership to on-site exercise facilities.

But participation in the wellness programs continues to be a concern. Nearly a third of the companies said less than 10 percent of their employees participate in the wellness program. Another 29 percent said 11 to 25 percent of their employees participate, while 23 percent of the firms said 25 to 50 percent of their employees participate. Only 1 percent of the companies said more than 90 percent of their employees participate in the wellness program.

What results are the wellness programs having? Four percent of the companies said they have seen a reduction in sick days since implementing wellness programs. But 65 percent said it was too early to tell and 31 percent said they haven't seen a reduction in sick days.

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