The Organizational Benefits of Employee Health Promotion Programs

Even the best and most innovative businesses are experiencing the impact worker well-being on their organizations´ performance. The bad news is that many of these businesses are unaware of the extent to which less-than-optimal worker health and well-being is impacting workforce capacity and performance. The goods news is that there is an increasing body of research and practice than may help businesses mitigate this frequently unseen issue and create significant opportunities for improved workforce attraction, retention and performance! This article focuses on how organizational leaders may improve physical and financial worker wellness in the worksite.

The Problems of Chronic Disease

According to the World Health Organization (WHO), 60% of deaths in 2005 could be attributed to chronic disease (cardiovascular disease, cancer, chronic respiratory diseases, and diabetes).1 The largest attributing factors to the chronic diseases include tobacco use, physical activity, and diet.2 The costs of these diseases are staggering. For example, if there were a 10% reduction in mortality from heart disease and cancer, it could save the US $10.4 trillion annually.3 Further the WHO projects that over 80% of the US population will be either considered overweight or obese by the year 2015.

The Problems of Financial Distress and Dissatisfaction

As hard as it may be to fathom, a 2004 study found that 67% of U.S. Workers are struggling with Personal Financial Issues.4 In another study, it was found that these issues may exist in all segments of any workforce, regardless of income, education, or position level.5 Couple these facts with our workforce reality:

The workforce is aging and demand for professionals in many industries continues to exceed the supply – and will for the foreseeable future.

Due to the shortages of quality personnel the stress on our current workforce is increasing.

With these workforce shortages, most businesses cannot continue to pay spiraling market prices for professionals.

Lastly, those personality traits that make many professionals excellent service-providers also tend to make them less likely to focus on matters of personal financial management.

The Return-on-Investment (ROI)

There are significant reasons why businesses should employ Procedures to implement Employee Health Promotion Programs for their workers:

Increase Productivity including reductions in healthcare and workers compensation claims, absenteeism, and presenteesism;

Lower employer paid healthcare and re-insurances premiums; and

Increase worker, physicians and patient satisfaction; and

Increase staff retention and productivity.

A recent Towers Perrin case study6 found that a ten percentage point improvement on worker engagement was linked to a 4.6 percentage point improvement on customer satisfaction and revenue growth and labor cost improvements equal to a 2.8% impact on controllable margin.

What all this shows is that offering Employee Health Promotion Programs and rewards is more than just "the right thing to do." Rather, there is a profound business case. As workforce capacity and engagement increase, a bottom-up cultural change takes place in your organization. These changes drive improvements in customer satisfaction, productivity, absenteeism, and presenteesism – all of which drive improvements in profitability.

The Course of Change

As an employer, you may have a tremendous impact on the health of the community. Here are a few suggestions on how you may engage your workers (possibly include flowchart):

1. Define the Plan – Determine if you have the internal resource availability and knowledge to develop a formal Employee Health Promotion Program. Many organizations, due to confidentiality legal and other reasons, choose to engage outside partners to manage these processes.

2. Communication – Once you have developed the plan, communicate the plan to all workers – using multiple media and approaches.

3. Lead by Example –Begin Employee Health Promotion Programs at the top (walk the walk). Grant yourselves the opportunity to go through a health risk assessment and a financial assessment. If you can, communicate your results and your action steps to staff.

4. Develop rewards for Staff Participation – Here are a couple of financial rewards you may provide staff that are low cost and optimally have a return on investment:

Pay workers to take a risk assessment

Lower employee contributions to medical plan for those with decreased risk of chronic disease and correspondingly raise employee contribution to medical plan for those with increased risk of chronic disease

5. Offer Personal Risk Assessment Counseling – Offer resources that can meet one on one with each worker to understand their health risks and opportunities

6. Eliminate Trans-Fat from Your Dietary Offerings – If you have onsite food facilities, and haven´t been required by legislative statute, you should eliminate trans-fatty oils from the worker and customer meals

7. Eliminate Smoking Areas for Workers – More and more organizations, including large cities, are now banning tobacco use on their facilities.

8. Offer Proper Monitoring Programs – Probably the hardest component of the plan, the ongoing monitoring is critical. Some organizations are large enough to own or build wellness centers – but even then, many workers feel uncomfortable in using them. Users of onsite wellness centers are those people that are least in need of the center. The good news is that there are many external and web-based tools and options that are available today.

9. Encourage Other Local Businesses to Offer Employee Health Promotion Programs. In some cases (e.g. hospitals), there are options where this may even generate revenue and/or deepen relationships with the communities you support.

Legal Issues

When thinking about an Employee Health Promotion Program, one must take into account certain requirements under ERISA, the Internal Revenue Code (Code) and the Public Health Service Act (PHSA). All three laws were amended by the Health Insurance Portability and Accountability Act of 1996 (HIPAA) to provide for improved portability and continuity of health coverage. HIPAA also added Code section 9802, ERISA section 702 and PHSA section 2702, each of which prohibits discrimination in health coverage based on health status.

To be a bona fide Employee Health Promotion Program, the plan must satisfy the following requirements:

An individual's total incentive must be limited. A limit of 10 percent to 20 percent of the total cost of employee-only coverage may be appropriate, according to the DOL.

The program must be reasonably designed to promote good health or prevent disease.

The incentive must be available to all similarly situated individuals. The program must allow any individual for whom it is unreasonably difficult because of a medical condition to meet the Employee Health Promotion Program standard (or for whom it is medically inadvisable to attempt to meet the Employee Health Promotion Program standard) an opportunity to satisfy a reasonable alternative standard.

1 2005 Preventing chronic disease: A vital investment. World Health Organization

2 2007 Working Towards Wellness: Accelerating the prevention of chronic disease. World Economic Forum

3 2007 The Value of Health and Longevity. Kevin M. Murphy and Robert H. Topal, University of Chicago

4 2004 Employer/Employee Equation Research on Worker Types, Preferences and Engagement Issues – Concours Group, Age Wave and Harris Poll

5 1997 Neal E. Cutler, Ph.D

6 2003 Talent Report: New Realities in Today´s Workforce – Towers Perrin