THE WILLIS HEALTH & PRODUCTIVITY SURVEY 2012 · Work/life balance programs are useful for employees...

THE WILLIS HEALTH & PRODUCTIVITY SURVEY 2012CHALLENGES – STRATEGIES – OUTCOMES

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ABOUT THE SURVEY

A web-based platform was used to collect,measure and analyze data. Completeresponses were submitted by 618organizations, with an additional 212completing a portion of the survey for a totalof 830 participants. Respondents representeda cross-section of organization sizes,industries and locations.

Willis asked organizations to respond to thesurvey regardless of whether or not theycurrently offered a wellness program. Thosewith no wellness program were asked if theyplan to offer one and, if not, what was theirmain reason was for not doing so.

Those organizations offering wellnessprograms were asked to detail programcomponents, incentives, participation, vendor

satisfaction and how results are measured. As noted above, sincesome participants did not complete the entire survey, thenumber of respondents is not consistent for each question.

ADDITIONAL INFORMATION

For additional information about the survey or to share acomment, write to:

Willis AmericasHuman Capital Practice – North AmericaOne Glenlake Parkway, Suite 1100Atlanta, GA [email protected]

With respect to all charts and tables in this document, not allsections total 100% due to rounding. A full technical appendixwith all survey data is available to Willis clients upon request.

A small employer (Fewer than 1,000 employees)

625

A large employer(1,000 or more employees)

205

Fewer than 100 217 26%

100-499 291 35%

500-999 117 14%

1,000-4,999 126 15%

5,000 or more 79 9%

ORGANIZATION SIZE NUMBER OF EMPLOYEES

3 THE WILLIS HEALTH & PRODUCTIVITY SURVEY 2012

PRIMARY INDUSTRY

GEOGRAPHIC REGIONS

Construction 48 6%

Consulting 12 1%

Education 46 6%

Financial Services,

Banking or Real Estate 49 6%

Gaming 3 1%

Health Care 86 11%

Higher Education 5 1%

Hospitality 18 2%

Insurance 28 3%

Legal Services 31 4%

Life Sciences 6 1%

Manufacturing 142 18%

Not-for-profit 57 7%

Public Entities 12 2%

Retail 28 3%

Service 22 3%

Technology 37 4%

Telecommunications

or Media 12 1%

Transportation 24 3%

Utilities or Energy 16 2%

Other 125 15%

807 100%

Northeast region

(NY, PA, MD, DE, NJ, CT, RI, MA, NH, VT, ME) 140 17%

Southeast region

(WV, KY, TN, NC, SC, VA, DC, GA, AL, MS, FL) 189 23%

North Central region

(MT, ID, WY, ND, SD, NE, KS, MN, MO, WI, IL, MI, IN, OH, IA) 255 32%

South Central region

(UT, CO, NM, OK, TX, AR, LA) 44 6%

West Coast region

(AK, AZ, WA, OR, CA, NV, HI) 82 10%

Nationwide 97 12%

807 100%



KEY FINDINGSHEALTH CARE COSTS

The top three challenges identified by participants in controlling health care costs:

48% Employees’ poor health48% High-cost catastrophic cases36% Underuse of preventive services

The following strategies are being used to control rising health care costs:54% Providing employees tools and resources to become better

consumers 50% Actively promoting health improvement programs 48% Implementing a high-deductible health plan

WELLNESS PROGRAMS

Over half (59%) of survey participants indicate they have some type of wellness program:

25% of respondents describe their program as basic26% of respondents have an intermediate program8% of respondents have a comprehensive program

INCENTIVES

Incentives remain a popular component in a health management strategy:79% of respondents are offering some type of incentive23% of respondents have an outcomes-based incentive

program in place

CONTROLLING HEALTH CARE COSTS

Most organizations indicate their main goalfor implementing a comprehensivewellness/health management strategy is tocontrol or manage rising health care costs.Survey respondents indicated that their topthree challenges to controlling costs were:

n Employee’s poor health habitsn High-cost catastrophic cases n Underuse of preventive services

WHICH OF THE FOLLOWING ARE YOUR TOP THREE CHALLENGES IN CONTROLLING HEALTHCARE COST?

Organizations are currently or planning to address thesechallenges by establishing a comprehensive benefits/wellnessstrategy that includes implementing high-deductible healthplans, actively promoting a health improvement program andresources and providing employees with tools and informationto become better health care consumers.

SURVEY FINDINGS


SURVEY FINDINGS

Employees’ poor health habits

High-cost catastrophic cases

Underuse of preventive services

Escalating cost of specialty pharmacy benefits

Poor employee understanding of how to use the plan

Poor information on provider costs

Overuse of care through employees seeking inappropriate care

Cost of compliance under Health Care Reform

Higher costs due to new medical technologies

Overuse of care through providers recommending too many services

Changes in workplace demographics

Poor information on provider quality

| | | | |

0 100 200 300 400

360 48%

356 48%

266 36%

214 29%

165 22%

88 12%

96 13%

182 24%

169 23%

77 10%

108 15%

25 3%

WHICH OF THE FOLLOWING STRATEGIES IS YOUR ORGANIZATION USING TO ADDRESS RISINGHEALTH CARE COST?

Provide on-site and/or telephonic health care support

Direct your employees to a public or private exchange

Tie employee contributions to biometric screening results (health outcomes)

Eliminate/reduce co-payments for medications and services used to treat chronic conditions

Manage prescription drug use

Provide employees with tools and information to become better consumers

Offer a defined contribution plan

Implementation of high-deductible health plan

Evaluation of multiple data points to create more targeted strategies

Actively promote health improvement programs and resources

Establish a comprehensive wellness strategy

| | | | | | | |

0 100 200 300 400 500 600 700

311 66 57 250

358 184 64 77

472 73 35 85

260 83 82 256

79 84 152 375

363 60 22 221

203 99 53 325

273 125 140 127

123 93 128 348

158 140 143 254

nNot considering nPlanning for in the next 3-5 years nPlanning for 2013 nCurrently in place

WORK AND LIFE – CONTINUING THE BALANCE ACT

Work/life balance programs are useful for employees balancing family careresponsibilities, personal health and wellbeing, financial obligations and work. Theseissues create distractors that not only impact employee health, but also workplaceproductivity. According to a 2011 report from the Families and Work Institute, men areexperiencing more work/family conflicts than in previous decades. The amount oftime men spent at work was an indicator in the amount of conflict facing families1.According to the report, both male and female employees are affected by a lack ofwork/life balance, such as flexible work hours, that provide assistance for allemployees in managing the stresses of their personal life while increasing workplaceproductivity.

Employers reported flexible work hours, paid maternity leave and lactation facilitiesas the top work/life balance programs offered by their organizations, as well ascommonly offered fitness and weight loss programs. In comparison to 2011 surveyresults, flexible work hours remains the most common employer-offered work/lifebalance option.


559 87 14 14

100% —

90% —

80% —

70% —

60% —

50% —

40% —

30% —

20% —

10% —

0% —

2012 2011 2010 2009 2008

11%

8%

25%n Basicn Intermediaten Comprehensiven No programn Planning to offer

one in the future

TOP THREE TYPES OF PROGRAMS

30%

26%

26%

24%

10%

8%

32%

8%

39%

7%

16%

30%

47% 47%

44% 45%

9% 8%


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2012 2011 2010 2009 2008

13%

13%

n Budget constraintsn Lack of management

supportn Dispersed staffn Lack of access to a

computern Too small or too few

employeesn Lack of ROI datan Insufficient time/staffn High stress and lack of

time among employeesn Not enough staff/time to

dedicate to thisn No interest in this type

of program

BARRIERS TO IMPLEMENTING A PROGRAM*

19%

15%

22%

45%

11%

46%

48%

61%68%

42%

43%

24%

26%


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*Respondents in 2008-2010 were asked to select their top three barriers to implementing a program.In 2011 and 2012, respondents selected only their main barrier to implementation.

HOW EFFECTIVE IS YOUR ORGANIZATION AT LEVERAGING THE FOLLOWING RESOURCES TO DRIVETHE HEALTH AND PRODUCTIVITY WITH YOUR WORKFORCE?

Health insurance carrier

Employee Assistance Program

Community resources (fitness center, grocery store, hospitals, etc.)

Third-party wellness vendor(s)

Internal staff and/or resources

Insurance broker/consultant

Grants

College/university resources

| | | | | | | |

0 100 200 300 400 500 600 700

nVery effective nEffective nSomewhat effective nNot effective nNot at all effective

99 239 229 60 24

54 152 234 96 83

14 96 213 180 109

12 68 170 209 131

31 105 152 153 144

53 174 226 88 69

101 224 204 58 41

10 17 41 141 347

9 28 62 145 321

Survey respondents reported their effectiveness at leveraging the following resources:

n Health insurance carriers (37%) and insurance broker/consultant (36%)n Employee assistance programs (38%) and community resources (35%)

When asked about leveraging the resources of the grants, college/universities, non-profit organizations, and third-party wellness vendors, respondents stated they felt either “not effective” or “not effective at all.”

Communication materials/resources were used to a moderate extent with approximately 34% of organizationsusing employee communication materials from medical carriers to communicate health insurance benefits.

LEVERAGING EXTERNAL RESOURCES

Medical carriers, third-party vendors and non-profit entities can assist organizations in developing and enhancingtheir wellness programs. Often resources from medical carriers and third-party vendors are untapped, even thoughorganizations are essentially “paying into” them through their fees for service. Non-profit organizations (e.g.,American Diabetes Association) and community resources (e.g., local hospitals) have tools and resources employerscan leverage, such as employer toolkits, speakers and communication content, and preventive care and healthscreenings promotion materials.


Non-profit organizations (American Diabetes Association, AmericanHeart Association, Red Cross, etc.)

MAKING THE MOST OF YOUR EAP AND FLU VACCINATIONS…MOVING BEYOND BASIC SERVICES

Employee assistance programs (EAP) remain the top wellness offering among respondents. However, historically, theuse of these programs has been low. Often this is due to a lack of communication or employee awareness as well as thefear or stigma associated with their use. In order to increase participation in your EAP program, consider marketing theprogram services under your wellness program umbrella and highlighting “real world” scenarios of how the EAPservices can assist employees.

Onsite flu vaccinations were the second most common wellness offering (82%). This percentage remains unchangedfrom our 2011 survey results. Employers may consider a “prevention push” during these onsite clinics. Sharinginformation related to age and gender-appropriate preventive screenings while you have a captive audience receivingtheir flu shot is a great way to promote preventive screening.

ONSITE FLU VACCINATIONS WERE THE SECOND MOST COMMON WELLNESS OFFERING(82%). THIS PERCENTAGE REMAINS UNCHANGED FROM OUR 2011 SURVEY RESULTS.

EMPLOYERS MAY CONSIDER A“PREVENTION PUSH” DURING THESEONSITE CLINICS. SHARING INFORMATION RELATED TO AGE ANDGENDER-APPROPRIATE PREVENTIVE SCREENINGS WHILE YOU HAVE A CAPTIVEAUDIENCE RECEIVING THEIR FLU SHOT IS A GREAT WAY TO PROMOTE PREVENTIVESCREENING.


TO WHAT EXTENT DO YOU USE THE FOLLOWING SERVICES OFFERED THROUGH YOUR MEDICALCARRIER TO SUPPORT WELLNESS INITIATIVES?

Health Risk Assessment (HRA)

Biometric Screenings

Disease Management/Case Management

Nurse Line

Employee Assistance Program (EAP)

Employee Portal

Communication Materials/Resources

| | | | | | | |

0 100 200 300 400 500 600 700

nTo a very large extent nTo a large extent nTo a moderate extent nTo a small extent nTo a very small extent

91 68 81 77 291

79 54 66 62 329

46 78 152 119 213

51 68 147 144 196

44 75 137 110 235

44 93 151 124 192

61 126 217 136 92

“THESE RESPONSES ALL SUGGEST AN OPPORTUNITY FOR MEDICAL CARRIERS EITHERTO PROVIDE MORE (OR MORE EFFECTIVE) SERVICES OR TO INTEGRATE (FOR EXAMPLE,DATA AND COMMUNICATION) MORE EFFECTIVELY WITH EMPLOYERS’ OTHER SERVICEVENDORS. MORE OR BETTER SERVICES OR MERE DATA INTEGRATION WILL NOT BEENOUGH.

Many respondents this year are new to wellness with approximately 65% having programs in place for threeyears or less. As in years past, physical activity tops the list with 90% of respondents stating they offerprograms that address physical activity. Since physical activity is often touted as the “gateway” for manyindividuals to behavior change, this seems like a logical approach for employers when getting started. Thenext most common program offering addresses nutrition, which, when combined with physical activity,reflects the recommendation for improving public health to “eat better, and move more” and directs allindividuals toward better health.

THE KEY WILL BE TO CONVERTDATA TO INFORMATION, INFORMATIONTO KNOWLEDGE, AND KNOWLEDGE TO ACTION.” THOMAS J. VAN GILDER, MD, JD, MPH

NATIONAL MEDICAL DIRECTOR, WELLNESS|HEALTH & PRODUCTIVITY SOLUTIONS, HUMANA


2012 2011 2010 2009 2008

111%

n Weight managementn Physical activityn Tobacco cessationn Lunch and learns

TOP FOUR SERVICES OFFERED THROUGH YOUR MEDICAL CARRIER TO SUPPORT WELLNESS INITIATIVES

53%

53%

49%

48%55%

48%

50%64% 66%

65% 62%

71%64%


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HOW DO YOU ADDRESS TOBACCO USE AS AN ORGANIZATION? PLEASE MARK ALL THAT APPLY.

We do not hire tobacco users

We conduct cotinine testing among our employees

We ask employees to sign or complete an affidavit of their tobacco use

We reimburse some or all of the costs of tobacco cessation programs

We offer a tobacco cessation program through a third-party vendor or community provider

We offer a tobacco cessation program through our health insurance carrier

We are completely tobacco-free on our worksite campus(es)

We have designated smoking areas on our worksite campus(es)

Our tobacco policy includes banning the use of electronic cigarettes

We have a written policy regarding tobacco use

We do not address it

We offer coverage, subsidy or reimbursement for prescription tobaccocessation medications under our medical or pharmacy benefits

| | | | |

0 50 100 150 200

10 3%

26 7%

71 19%

69 18%

109 29%

95 25%

85 22%

160 42%

131 35%

183 48%

27 7%

196 52%

37 10%

WHAT RESOURCES ARE EMPLOYERS USING?

Employers use a variety of resources to help implement their wellness programs and often look to partner with a third-party vendor to help provide solutions for a comprehensive program. Year after year, we find that many companies areturning to a third-party vendor, with 26% reporting that they use a third-party vendor to support their wellnessprogram efforts. Most of these organizations are looking for comprehensive program offerings and support with moreservices, regular reporting data and incentive design flexibility and fulfillment. Over half have had a third-party solutionin place for two years or less with the majority (79%) indicating they have some level of satisfaction with their vendor.

ADDRESSING TOBACCO USE

As organizations continue to look for ways to improve the health of their populations, tobacco cessation remains at thetop of the list of their current wellness program initiatives. Clients are still concerned with tobacco use among theiremployees and want to know what other organizations are doing in the area of tobacco cessation. More and moreorganizations are providing resources for tobacco cessation through their medical carrier or third-party vendor.Compared to the Willis 2011 survey results, there was a 4 % increase for nicotine testing and a 3% increase in tobaccofree campuses.


We offer coverage, subsidy or reimbursement for over-the-counter tobaccocessation products (gum, patch, etc.)

HOW DO YOU COMMUNICATE YOUR WELLNESS PROGRAM? PLEASE MARK ALL THAT APPLY.

| | | | | | | |

0 50 100 150 200 250 300 350

85 23%

183 49%

204 54%

73 19%

16 4%

3 1%

142 38%

211 56%

255 68%

225 60%

328 87%

58 15%

140 37%

Mail to employees’ homes

Bulletin boards

Open enrollment

Dedicated web portal

Social media – Twitter, Facebook, blogs, etc.

Text messaging

Intranet resources

Printed materials – flyers, posters, paycheck stuffers

Newsletters

Emails

Town hall meetings

Departmental staff meetings

EMPLOYERS. . . SEEM TO BE RELYING ON STANDARD METHODS VERSUS EMERGING MEANSOF COMMUNICATION. . . THE PRIMARY AVENUE FOR REACHING EMPLOYEES IS E-MAIL(87%), PRINTED MATERIALS (67%) AND NEWSLETTERS (60%). ALTHOUGH THE USE OFSOCIAL MEDIA CONTINUES TO RISE, ONLY 4% OFRESPONDENTS ARE USING SOCIALMEDIA AND EVEN LESS, JUST 1%, ARE USING TEXT MESSAGING. . .


Wellness committee members share informationto their departments or locations

HOW OFTEN DO YOU COMMUNICATE YOUR WELLNESS PROGRAM OFFERINGS TO EMPLOYEES?

92 25%

5 1%

30 8%

151 40%

| | | | |

0 50 100 150 200

Only as needed during campaigns

Daily

Weekly

Monthly

Quarterly

Twice a year

Annually/at open enrollment

48 13%

21 6%

29 8%

HOW EFFECTIVE DO YOU FEEL YOUR COMMUNICATION EFFORTS ARE AT DISSEMINATING KEYPROGRAM INFORMATION SUCH AS UPDATES AND EVENTS?

25 7%

222 59%

111 30%

18 5%

| | | | | |

0 50 100 150 200 250

Not effective

Somewhat effective

Effective

Very effective

COMMUNICATION

Effective communication is a key factor in reaching target populations and engaging employees. Many respondents(40%) report branding their program, which helps the organization formalize their efforts and can increase overallrecognition and employee participation. Over half of respondents (54%) are including an explanation of their wellnessprogram in both recruitment and the new hire orientation process.

Employers continue to rely on inexpensive ways to reach their employees but seem to be relying on standard methodsversus emerging means of communication. This year again, the primary avenue for reaching employees is e-mail (87%),printed materials (67%) and newsletters (60%). Although the use of social media continues to rise, only 4 % of respondentsare using social media and even less, just 1%, are using text messaging to reach potential wellness program participants.

Many employers (40%) are communicating information about their wellness programs on a monthly basis, although66% of respondents feel their communication efforts are only somewhat or not effective. A comprehensive and creativecommunication strategy, including soliciting employee feedback, may be warranted to improve the overall effectivenessof program communication and may ultimately improve employee engagement.


COMMUNICATION CHALLENGES

The leading communication challenges employers sited are:

n Lack of time/interest among employees 62%n Employees spread out at various geographic locations 53%n Employees without computer access at work 45%

Additionally, survey results for both this year and last reflect that 41% of respondents identify reaching spouses as achallenge. As more employers recognize the value of including spouses and dependents in their health promotionefforts, creative solutions will need to be explored as well as a modified communication strategy implemented.

WELLNESS BUDGET

WHEN THINKING ABOUT YOUR WELLNESS PROGRAM'S STRATEGY WHICH STATEMENTS MOSTCLOSELY REFLECT YOUR ORGANIZATION'S APPROACH?


| | | | | | | | |

0 50 100 150 200 250 300 350 400

nStrongly agree nAgree nNot sure nDisagree nStrongly disagree

142 160 43 13 6We want to reward employees who are taking steps towards health improvement

We have implemented penalties to employees who are not taking steps towards health improvement

We have aligned our worksite culture to support employee health improvement

We want to improve employee health and offer programs that address their personal health risks

29 56 32 121 126

59 147 101 52 5

237 114 10 3

Best practices dictate that visible leadership support and dedicated financial support of a worksitewellness program are essential to a successful program. The majority of respondents (86%) provide acompany-funded wellness program. Avenues of program funding were reported to include:

n Company funded 86%n Carrier funded 18%n Employee contributions 8%n Other 7%

Despite the research that supports the necessity of a financial investment to realize a return or benefitfrom the worksite wellness program, 40% of respondents do not have a defined budget for worksitewellness. Additionally:

n 24% of respondents invest $50 or less per employee per year in their programs n 16% of respondents invest $51 to $100 per employee per year in their programsn 4% of respondents invest between $101 to $149 per employee per year in their programsn 17% of respondents invest $150 or more per employee per year in their programs

WHAT IS THE COMPANY'S ESTIMATED PER EMPLOYEE PER YEAR COST FOR THE WELLNESSPROGRAM INCLUDING INCENTIVES, STAFFING, VENDORS, ETC.?

149 40%

40 11%

47 13%

30 8%

| | | |

0 50 100 150

No defined budget for worksite wellness

$25 or less

$26 to $50

$51 to $75

$76 to $100

$101 to $149

$150 or more

28 8%

14 4%

62 17%


HEALTH ASSESSMENTS AND BIOMETRIC SCREENINGS

Offering health assessments has become a common component in manyorganizations’ wellness programs, from those with a basic program to those thatoffer comprehensive programs. The aggregate data received helps organizationsunderstand the health risks of their employee population, plan targeted programsand observe changes in risks over time. The majority of respondents (74%) statedthat they understand the value of offering this type of assessment and most use thehealth assessment tool offered through their medical carrier.

While incentives are also more common today than ever, many employers struggleto determine what the right incentive is for driving employees toward the desiredbehavior. We have captured the most frequently used types of incentives thatemployers are offering to drive health assessment participation throughout the lastfive years of the Willis survey. Year after year, more organizations are using theirmedical plan contribution strategy as the incentive for meeting wellness programcriteria; more specifically, implementing a premium differential as the wellnessprogram incentive.

WHAT IS YOUR HEALTH ASSESSMENT PARTICIPATION RATE?

74 28%

56 21%

66 25%

73 27%

| | | |

0 25 50 75

76% or more

51% to 75%

26% to 50%

25% or less


DO YOU OFFER A HEALTH RISK QUESTIONNAIRE AS PART OF YOUR WELLNESS PROGRAM?

9 3%

108 30%

153 42%

94 26%

| | | | | | |

0 25 50 75 100 125 150

Yes, through a free web-based tool

Yes, through a third party vendor (e.g. wellness vendor)

Yes, through our medical carrier

No

WHAT IS THE INCENTIVE(S) FOR HEALTH ASSESSMENT COMPLETION? PLEASE MARK ALL THAT APPLY.

No incentive(s) offered for completing the health assessment

Require completion to receive health insurance coverage

Contribution to health account (health FSA, HRA or HSA)

Lower employee cost (premium contribution) for medical plan

Lower plan deductible, co-insurance or co-pays

Accumulate points for prizes

Cash/gift cards

Raffle for larger prizes

Smaller prizes for each participant

Paid time off

Other

| | | | |

0 25 50 75 100

55 20%

20 7%

32 12%

91 34%

10 4%

19 7%

80 30%

27 10%

9 3%

7 3%

7 3%

JUST AS ORGANIZATIONS ARE PROVIDING AN INCENTIVE FOR HEALTH ASSESSMENTCOMPLETION, THEY ARE ALSO OFFERING INCENTIVES TO THOSE EMPLOYEES THAT PARTICIPATE IN BIOMETRIC SCREENINGS. ONCE AGAIN WE FOUND THAT THEMOST POPULAR INCENTIVE OFFERED IS A PREMIUM DISCOUNT.


100% —

90% —

80% —

70% —

60% —

50% —

40% —

30% —

20% —

10% —

0% —

2012 2011 2010 2009 2008

20%

34%

n Lower premium contributionn Contribution to HSA, HRAn Raffle for large prizen Cashn No incentive

TOP FIVE INCENTIVES FOR HEALTH ASSESSMENT PARTICIPATION

30%

38%

20%

40%

18%

33%

28% 29% 31%

21%22%

18%16%


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DO YOU OFFER BIOMETRIC SCREENINGS AS PART OF YOUR WELLNESS PROGRAM?

No

Yes, through a local provider (e.g.hospital system or public health department)

Yes, through our medical carrier

Yes, through a third party vendor (e.g. wellness vendor)

Yes, through a lab vendor (e.g. Concentra, Quest, other)

Yes, through on-site practitioner/clinic

129 36%

31 9%

74 21%

90 25%

16 4%

21 6%

| | | | | | |

0 25 50 75 100 125 150

WHAT IS THE INCENTIVE(S) FOR BIOMETRIC SCREENINGS? PLEASE MARK ALL THAT APPLY.

No incentive(s) offered for biometric screenings

Require completion to receive health insurance coverage

Contribution to health account (health FSA, HRA or HSA)

Lower employee cost (premium contribution) for medical plan


Accumulate points to earn prizes

Cash/gift cards


Smaller prizes for each participant

Paid time off

Other

| | | | |

0 25 50 75 100

50 22%

13 6%

24 10%

79 34%

8 3%

24 10%

27 12%

8 3%

6 3%

8 3%

54 23%

WHAT IS YOUR BIOMETRIC SCREENING PARTICIPATION RATE?

55 24%

54 23%

76 33%

47 20%

| | | |

0 25 50 75

76% or more

51% to 75%

26% to 50%

25% or less


WHAT TYPES OF INCENTIVES DO YOU OFFER FOR PARTICIPANTS WHO MEET PROGRAM CRITERIA?

Contribution to a health savings account (health FSA, HRA or HSA)

Lower employee cost (premium cost) for medical plan


Small prizes


Cash/gift card

Paid time off

Other

| | | | | |

0 25 50 75 100 125

36 14%

103 40%

13 5%

67 26%

61 24%

124 48%

20 8%

22 9%

INCENTIVES

Overall incentive usage is on the rise with 79% of respondents offering some type of incentive to their employees aspart of their wellness initiatives. As in years past, the most common types of incentives reported by employersinclude cash or gift cards (48%) and a premium discount for the health plan (40%).

Of those employers offering health plan premium discount, the most common criteria to earn the incentives are:

n Completion of a health risk assessment (HRA) (68%)n Completion of a biometric screening (63%)n Tobacco use status (37%)n Completion of an annual physical/wellness visit (35%)

The amount of the premium discount being offered has remained constant over the past several years, with themajority of respondents offering a monthly premium discount between $11-$50 per month for a single plan and $51-$101 per month in premium reductions.


OUTCOMES-BASED INCENTIVE DESIGN

The typical goal of many worksite wellness programs is to provide employees, and often spouses, with the toolsand resources to improve their personal health with the desired outcome being a healthier employee populationand reduced health care costs. Offering incentives has become an integral part of these worksite wellnessprograms with the hope of motivating people toward behavior change. Many organizations continue to strugglewith questions (e.g., how much, what type or what criteria) that arise when developing their incentive strategy.What motivates employees to participate in programs varies significantly based on a multitude of variables thatmay include organization culture, concerns regarding confidentiality or personal readiness to change.

As the prevalence of worksite wellness programs continue to grow, so do the challenges associated with trulydriving behavior change versus simply promoting participation. Many employers are seeking new or innovativestrategies to increase engagement or, more importantly, new levers that will influence a more desirable outcome.This has created significantly heightened interest from many employers in adopting an outcomes-based incentivedesign into their programs.

An outcomes-based incentive program as defined by the “Guidance for a Reasonably Designed, Employer-Sponsored Wellness Program Using Outcomes-Based Incentive,” JOEM, July 7, 2012, includes any effort inwhich “a reward or penalty is tied to an individual achieving or making progress toward a standard related to ahealth factor.”

While there are limited recommendations regarding the amount and type of health factors that employers shouldbe considering, guidance released by the Department of Labor in a 2008 Field Assistance Bulletinrecommended four biometric categories:

n Weight-related standard ( or body fat percentage)n Cholesterol n Blood pressuren Tobacco use

Research indicates that most employers using an outcomes-based approach incorporate one or all of these fourcategories as the criteria for their incentive design.

Our survey results align with these recommendations; the top criteria used as part of respondents’ outcomes-based designs were most commonly reported as tobacco use status and blood pressure target measures.


http://www.dol.gov/ebsa/regs/fab2008-2.html

http://journals.lww.com/joem/Fulltext/2012/07000/Guidance_for_a_Reasonably_Designed,.20.aspx

http://journals.lww.com/joem/Fulltext/2012/07000/Guidance_for_a_Reasonably_Designed,.20.aspx

HIPAA GUIDELINES IN 2006, THE DEPARTMENTS OF TREASURY, LABOR, AND HEALTH AND HUMAN SERVICESISSUED CLARIFICATIONS AND FINAL REGULATIONS ON WELLNESS PROGRAMS THAT FALLUNDER HIPAA NON-DISCRIMINATION RULES. THE FIVE HIPAA GUIDELINES ARE:

n LIMIT ANY REWARD OFFERED UNDER THE PROGRAM TO 20% OF THE COST OFEMPLOYEE-ONLY COVERAGE. IF DEPENDENTS (SUCH AS SPOUSES AND/ORDEPENDENT CHILDREN) PARTICIPATE IN THE WELLNESS PROGRAM, THE REWARDMUST NOT EXCEED 20% OF THE COST OF THE COVERAGE IN WHICH AN EMPLOYEEAND ANY DEPENDENTS ARE ENROLLED.

n OFFER AN ANNUAL OPPORTUNITY FOR PARTICIPANTS TO QUALIFY FOR THEPROGRAM.

n BE REASONABLY DESIGNED TO PROMOTE HEALTH OR PREVENT DISEASE.

n PROVIDE A REASONABLE ALTERNATIVE TO INDIVIDUALS WHO MEDICALLY CANNOTMEET THE REQUIRED STANDARD. FOR EXAMPLE, ASSUME AN EMPLOYER IMPLEMENTSA WELLNESS PROGRAM THAT ESTABLISHES CERTAIN BODY MASS INDEX (BMI)REQUIREMENTS; HOWEVER, AN EMPLOYEE HAS A THYROID CONDITION THAT MAYHINDER HIM FROM MEETING THE REQUIREMENT. RATHER THAN MEET THE BMIREQUIREMENT, THE EMPLOYEE MAY BE ASKED TO DOCUMENT THE USE OF THYROIDREGULATING DRUGS AND PHYSICIAN FOLLOW-UP VISITS. NOTE THAT THE PLAN MAYASK FOR VERIFICATION (E.G., A DOCTOR'S NOTE) THAT A HEALTH FACTOR MAKES ITUNREASONABLY DIFFICULT FOR A WELLNESS PROGRAM PARTICIPANT (OREMPLOYEE) TO MEET A PARTICULAR HEALTH STANDARD.

n DISCLOSE THE AVAILABILITY OF THE ALTERNATIVE STANDARD.

KNOW YOUR NUMBERS/KNOW THE LAWS

Employers using an outcomes-based program design and offering a contribution or premium discount as theincentive must establish wellness programs that satisfy the specific requirements outlined in the 1996 HealthInsurance Portability and Accountability Act (HIPAA) wellness regulations. While most employers are familiarwith the HIPAA regarding privacy, security and portability rules, there seems to be less awareness of the HIPAAnondiscrimination provisions. HIPAA’s nondiscrimination provisions prohibit a health plan or insurer fromdiscriminating against individuals with respect to eligibility, premiums or contributions on the basis of a “health status-related factor.” Here are the details:


IMPORTANTQUESTIONS TOASK YOURVENDOR PARTNERSn IS YOUR PROGRAM HIPPA

COMPLIANT?

n DO YOU HAVE THE ABILITY TOADMINISTER AN EMPLOYEEAPPEALS PROCESS?

n WILL YOU PROVIDE GUIDANCEON DEFINING HEALTHSTANDARD METRICS?

n DO YOU PROVIDE GUIDANCEOR MATERIALS ONCOMMUNICATING ANOUTCOMES-BASED PROGRAM?

n DO YOUR COMMUNICATIONMATERIALS INCLUDE THEALTERNATIVE STANDARDLANGUAGE?

n DO YOU PROVIDE ANINCENTIVE QUALIFICATIONREPORT?

While an outcomes-based incentive program may seem tooaggressive or may not align with your organization’s culture,using this approach to drive outcomes is working for someorganizations and may be a route worth considering. Whenrespondents were asked what results their organizations haverealized from their current outcomes-based program, themajority (52%) indicated that it is too early to assess the impact,but roughly 20% stated that health risks are improving and 13%stated that claim costs are decreasing/below trend.

No matter what incentive design structure your organizationemploys, we know that behavior change is extremely difficult.The challenges continue to exist in creating a culture andenvironment that supports health and wellness. Helping youremployees identify their personal motivators to make andmaintain healthy lifestyle changes will impact both personalhealth risks and employers’ bottom lines.

A WORD ON ALTERNATIVE STANDARDS

Our survey results indicated that almost 42% of thoserespondents with an outcomes-based program in place do notoffer an alternative standard for those employees unable tomeet the defined criteria. This leads us to the conclusion thatthere may be a lack of understanding regarding the applicationof the HIPAA provisions or that employers are not receivingadequate guidance in the planning and implementation of theseoutcomes-based incentive programs. For those respondentsreporting that they do offer an alternative standard, roughly37% offer the completion of a specific lifestyle behavior programas their alternative standard, while 27% offer improvementcriteria and 30% allow a note from their physician. To ensurethat your program is compliant, be sure to discuss incentivecompliance with your vendor partners.



“Reasonable alternatives for wellness programs that are tied to group medical plans must bepart of any program that uses health status as part of its program. The reasonablealternative is for those participants for whom meeting the particular health status goalwould be medically unreasonable. The reasonable alternative must be made available and thefact that there is a reasonable alternative must be communicated to the participants to meet the HIPAA requirements.

Instead, it is acceptable (and likely required) for the employer tomake an accommodation that fits the needs of the individual who cannot otherwise meet therequirements of the wellness program in order to obtain the same incentive. For example, ifsomeone is addicted to nicotine and that renders it medically unreasonable for the person tobe tobacco-free, the employer and the individual can design an individual alternative thatwould be reasonable. For instance, attending a smoking cessation program might bereasonable for one person but not for another (such as a single parent who cannot leave hischild while he attends the program). So, perhaps the second person would be given theoption to comply with his physician’s instructions, or something similar. The important factoris that a one-size-fits-all approach is not necessary, but some alternative needs to becommunicated and offered.”

Jay Kirschbaum, JD, LLM, FLMIPractice Leader, National Legal & Research GroupWillis Human Capital Practice

HOWEVER, THERE IS NOREQUIREMENT THAT THE PLAN OR THEEMPLOYER SPELL OUT JUST WHAT THAT REASONABLE ALTERNATIVE IS INADVANCE.

PROGRAM EVALUATION AND MEASURING SUCCESS

The most common barriers reported to measuring success are:

n Hard-to-determine influence of wellness programversus other factors impacting healthcare costs (44%)

n Too early to measure impact (40%)n Insufficient data (37%)n Not enough staff time dedicated to this (36%)

These barriers vary little from previous years’ surveys. Althoughprogram evaluation remains a challenge for many, it is still anexercise worth pursuing. Determining the evaluation metrics andmeasures to quantify program success during the planning stagescan ease this confusing process and help organizations identifyvendor partners that can meet their reporting and evaluationneeds.

Survey respondents report management support, a stronginternal leader championing wellness and a culture of health asthe most influential factors in the success of their wellnessprograms. These three factors differ a bit from the results of the2011 survey, with culture of health climbing into the top threefactors rating average.


2012 2011 2010 2009 2008

43%

47%

n Participationn Participation in the

health assessmentn Claimsn Utilization of services –

wellness programn Participation in

biometric screenings

TOP FIVE METHODS FOR MEASURINGSUCCESS OF A WELLNESS PROGRAM

57%

41%

25%

44%

28%

44%

41%

84% 86%

71%64%

59%60%


MUL

TI-Y

EAR

COM

PARI

SON

2012 2011 2010 2009 2008

39%

40%

n Too early to measurereturn

n Insufficient datan Hard to determine

influence of wellness vs.the factors which impacthealth care costs

n Not enough staffing/timededicated to this

n Unreliable

TOP FIVE BARRIERS TO MEASUREMENT

44%

41%

32%

43%

40%

30%

38%45%

56%

40%

50%

40%19%


MUL

TI-Y

EAR

COM

PARI

SON

When asked about measuring program impact, respondents report the followingtrends with regard to population health risks:

n Health risks are improving 29%

n Health risks are getting worse 4%

n No change in population health risks 46%

n Claim costs have been steady/in line with trend 20%

n Claim costs have been decreasing/below trend 16%

n Claim costs have been increasing/above trend 10%

Despite the challenges reported in measuring success of a wellness program, themajority of employers are reporting that health risks are improving or areunchanged. While improvement is the ultimate goal, the philosophy of “don’t getworse,” prescribed by Dee W. Edington, formerly of the University of MichiganHealth Management Research Center, is also worth noting. According toEdington, “Even when risk status stays the same rather than getting worse, costsremain constant or are even reduced.” Zero Trends-Health as a Serious EconomicStrategy, 2009.


WHAT ARE YOUR GOALS OR NEXT STEPS FOR YOUR WELLNESS PROGRAM STRATEGY?PLEASE MARK ALL THAT APPLY.

Program evaluation

Expansion – add programs and resources

Enhance benefit design strategy to align with wellness program goals

Improve management engagement and support

Improve employee participation and engagement

Increase or establish budget

Partner with a third-party vendor

Move to/add outcomes-based model

Designate or hire an internal program leader

Form a wellness committee

Assess our corporate culture for opportunities to integrate wellness

Develop/expand a formal communication plan/strategy

No plans to change program – maintain current effort

Other, please specify

| | | | | | |

0 50 100 150 200 250 300

197 56%

127 36%

166 47%

253 72%

96 27%

41 12%

89 25%

13 4%

64 18%

95 27%

110 31%

34 10%

10 3%

161 46%

PROGRAM GOALS AND NEXT STEPS

Engaging employees, program expansion/adding resources and improving management engagement and supportcontinue to be the top three program goals that employers are focused on for the future. In this year’s survey, as in2011, improving employee participation is the number one goal for organizations’ strategies looking forward (72%in 2012, 76% in 2011). Employers stated they plan to invest in their wellness initiatives by adding programs andresources (56%) despite the uncertain economic environment. Other goals and next steps include:


FINAL THOUGHTSREVISITING BEST PRACTICES

As more organizations are focused on the impact of Health Care Reform and controlling escalating health care costs,the prevalence of workplace wellness programs has continued to grow as one of the primary strategies for controllingcosts. Employer-sponsored wellness programs have been around for several decades, although in past years were oftendeveloped by trial and error, focused primarily on physical health and included minimal program evaluation. Twenty-five years ago, in the infancy of health promotion, there were only five studies published on the financial impact ofhealth promotion. Now, more than 62 studies validate the business case for health promotion programs. However, anenormous opportunity remains in the field of health promotion to take a prescriptive approach, as more employersseek to quantify the impact and effectiveness of workplace wellness programs.

What are the programs and activities that make the difference for employers of all sizes? What percentage ofparticipation is required to make a cost impact? What is the best and most effective incentive structure? These are alltoo familiar questions because the future for health promotion and workplace wellness is slow to reveal definitiveanswers due to variables, such as organizational culture and norms, employee engagement, and many others that cansignificantly impact program outcomes.

While many variables can impact program effectiveness, today we have clearly defined best practices for workplacewellness programs. Many organizations continue to expand their offerings to include comprehensive programs thatsupport physical, mental, intellectual and spiritual health as well as integrating programs to support a work/lifebalance for their employees. For many employers, workplace wellness programs have become part and parcel of theoverall benefits package highly promoted to contribute to attracting and retaining quality talent and often extendingthese benefits to family members as well.

Several highly regarded resources have made it their mission to improve the health of the U.S. workforce by researchingand developing best practices in health promotion and workplace wellness. These organizations include The NationalBusiness Group on Health (NBGH), Wellness Councils of America (WELCOA), The Health Enhancement ResearchOrganization (HERO), American Journal for Health Promotion as well as many business and health thought leaderswho have contributed their experience and expertise to these organizations.

TWENTY-FIVE YEARS AGO, IN THE INFANCY OF HEALTH PROMOTION, THERE WEREONLY FIVE STUDIES PUBLISHED ON THE FINANCIAL IMPACT OF HEALTH PROMOTION.

HOWEVER,AN ENORMOUS OPPORTUNITY REMAINS IN THE FIELD OF HEALTH PROMOTION TOTAKE A PRESCRIPTIVE APPROACH, AS MORE EMPLOYERS SEEK TO QUANTIFY THEIMPACT AND EFFECTIVENESS OF WORKPLACE WELLNESS PROGRAMS.

NOW, MORE THAN 62 STUDIESVALIDATE THE BUSINESS CASE FORHEALTH PROMOTION PROGRAMS.


In reviewing the most respected sources for workplace wellness bestpractices, there is significant overlap or duplication with the mostcommonly cited best practice benchmarks being:

n Program supportn Strategic planning n Cultural supportn Appropriate programs/interventions n Engagement strategies n Measurement and evaluation

One of the most important, although frequently overlooked standardsis the concept of approaching workplace wellness as an integratedorganizational strategy, building health into the organizationalculture. In his landmark book, Zero Trends: Health as a Serious

Economic Strategy, Dee Edington, PhD., Director of the University ofMichigan Health Management Research Center (HMRC) draws on his30-plus years of experience and research to show how organizationscan manage escalating health care costs while keeping theirworkforces healthy and productive. “Our goal is to convinceorganizations to make health an integral part of their corporateculture.” He goes on to state that helping companies recognize thatthey can create economic value by investing in healthy and productivepeople has been at the core of the HMRC’s work since its inception.

More organizations have come to the understanding that a healthyand productive workforce is not only a cost controlling mechanismbut offers a competitive edge necessary for sustainability in an era ofeconomic uncertainty. But we must keep in mind that healthyorganizations do not occur in a vacuum and are not created overnight.Developing programs that are integrated into all aspects of theorganization’s mission, providing comprehensive resources to allemployees and their family members while creating a health-supporting environment, should be some of the overarching goals.Striving to align your workplace wellness programs with best practicebenchmarks can increase the likelihood of creating successfulprograms that support employee behavior change and yield positivehealth outcomes.

1 Aumann K, Galinsky E, & Matos K. The New Male Mystique: Family and WorkInstitute; 2011.

IS TO IDENTIFY AND PUBLISHSTANDARDS THAT ASSISTPROGRAM PLANNERS INCREATING AND SUSTAININGRESULTS-ORIENTED PROGRAMSTHAT ULTIMATELY IMPROVEPOPULATION HEALTH. THESEGUIDELINES TYPICALLY IDENTIFYPROGRAM COMMONALITIES THATHAVE CONTRIBUTED TOSUSTAINABLE AND EFFECTIVEWORKPLACE WELLNESSPROGRAMS.

THE COMMONGOAL INDEVELOPINGBEST PRACTICEGUIDANCE


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