Wellness Programs: Where We've Been and Where We are Heading

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Wellness Programs: Where We've Been and Where We are Heading

Over the past several years having some form of wellness program for your employees has gone from a cutting edge forward thinking trend, to a mainstream part of many employer’s benefit plans. While the catalysts for this immense growth in the wellness movement are varied depending on the stakeholders involved, most of the changes in strategy, whether being implemented by healthcare providers, the health insurance industry, or even the federal government, are focused on preventative healthcare.

What follows is a brief overview of where wellness programs stand today as well as what these quickly evolving programs and laws could mean for employers and employees alike in the near future.

Staying on Trend

According to the 2015-2016 ERC Policies & Benefits Survey, approximately 90% of the participants from Northeast Ohio pay for or contribute to one or more programs aimed at encouraging employee wellness. This number has remained consistently slightly above the national sample, where about 85% of employers are involved in offering at least one wellness focused program to their employees.

More specifically, the most commonly offered programs include benefits such as flu shots, Employee Assistance Programs (EAPs), smoking cessation classes, blood pressure and/or cholesterol checks, and classes on nutrition.

Of course, how much of these programs each employer chooses to pay for and the requirements associated with continuing employee eligibility to receive these programs at a free or reduced cost can vary significantly between employers.

For example, exercise programs are made available to employees at slightly less than half of the participating employers in the Policy & Benefits Survey. Of this subset of employers, some provide fully paid memberships to external fitness facilities while others only offer partial reimbursement or reduced rates at specific facilities.

Some larger organizations are able to provide employees with on-site exercise facilities, while others choose to offer more limited organization sponsored recreational activities that may only take place a few times a year.

One explanation for the variations in the size and value of the offerings listed above is closely tied into the size of the organization itself. However, beyond headcount, each employer should assess the needs and desires of their workforce, their own financial capabilities, the cultural expectations and norms to which they aspire, and of course what each option could mean for their bottom line in terms of overall spending on benefits long term before throwing together a new wellness program or offering.

By first getting a better understanding of how various wellness programs can be implemented for the maximum benefit of their employees, an employer can also maximize the likelihood that the program will have stronger participation and ultimately a more dramatic financial benefit for the organization overall.

Recent Legal Developments

In terms of the legal landscape, the Affordable Care Act (ACA) is certainly the most noteworthy driver of employer based wellness programs. Specifically, the ACA addresses incentive based wellness programs: those that provide some benefit to employees for either participating in or achieving a certain goal related to health and wellness.

Locally, about 43% of employers from the Policies & Benefits Survey have a wellness incentive attached to their medical plans, about 10% higher than the national statistics. Most commonly, at about 70% of these organizations, the incentive is simply a reduction in the employee’s premium, although a smaller percentage also offer certain enhanced benefits as part of the incentive.

The ACA also spells out exactly how much (30% of the cost or employee only coverage) and in what way these incentives can be applied (as either a reward or penalty and with limitations on what health information can be obtained on a voluntary basis).

However, employers must also keep in mind that the ACA is not the only federal law that comes into play when structuring incentive based wellness programs. One example is a proposed rule from the Equal Employment Opportunity Commission (EEOC) in 2015 which seeks to clarify and remedy any perceived conflicting language between the ACA and the Americans with Disabilities Act (ADA).

The proposed rule continues to permit incentives, but emphasizes the importance of confidentiality when collecting health information from employees as well as reinforcing the importance of making “reasonable accommodations” and “voluntariness” when employees are limited in their ability to participate in certain wellness programs by a health condition or disability. In light of the latest set of proposed rules, employers with existing wellness programs that leverage incentives may want to review the details of their programs to ensure their compliance.

Looking ahead, the EEOC is likely to issue additional clarifying rules on the interactions between the ACA and other federal laws related to healthcare and healthcare information including the Genetic Information Non-Discrimination Act (GINA) and the Health Insurance Portability and Accountability Act (HIPAA).

View the Wellness Practices Survey

This survey report summarizes the results of ERC’s survey of organizations throughout Northeast Ohio on practices related to health care and wellness.

View the Results