A Wellness Smell Test

Tuesday, February 10, 2015 | 0

Here is a wellness needs-analysis to help you choose the best approach for your company.

Barry Thompson

Let us first remove marketplace influences. My offering herein is based on wordings, definitions, regulations and related government proposals from the Employee Benefits Security Administration, Department of Health and Human Services, and other Affordable Care Act-related government writings easily found via Google. This serves to set a high-level framework, certainly not “legal advice,” yet respecting that when it comes to government, today’s suggestions are tomorrow’s compliance issues.

More importantly, this perspective takes out the profit-driven vendor’s depiction of what might be best for your company.

The essence is pleasantly simple. Wellness is defined by government in two forms:

1) Participatory Wellness: Provides health-related opportunities equally to all workers, such as reimbursed gym membership, classes on weight loss, smoking cessation and other health/lifestyle issues. Participants can be offered low-level rewards like gift cards. Program aspects must be equally open to all employees.

2) Health-Contingent Wellness: More personally intrusive programs that seek to identify individual health factors and provide individual risk-condition-focused requirements with incentive/penalty aspects of up to 30% in premium costs to the individual. Basically, smokers and employees with high cholesterol and high body mass index can pay more insurance premiums, unless they follow a “reasonable” regime with “reasonable” results to address these problems… “Reasonable” as a government term being clear like mud.

I would wager most readers appreciate this simple explanation and gravitate toward participatory programs, correctly assuming that this is the least expensive, least intrusive, and frankly the most respectful of an employee’s desire to engage. It provides all aspects of goodwill in the spirit of wellness and it most certainly helps the individuals who are determined to help themselves. Optimally applied, it offers a gentle positive push via passive awareness efforts, essentially “farming” for participants as opposed to actively “hunting” for candidates via the health screenings required in health-contingent programs.

This seems like a no-brainer and therefore begs the question – is there any logical place for health-contingent programs? After all, they cost a ton (averaging over $600 per employee) and have not been shown to improve health or return dollar savings in any commensurate way. In some sense they are totally illogical in presuming today’s employees are tomorrow’s health risk. Consider that any employer’s turnover rate equals a wasted percentage of today’s health-contingent wellness dollar. Further, few employers today offer retirement health plans and therefore do not “own” the highest risk period of most employee's lives.

Let me simplify further – when selling a house, you cancel and prorate your homeowners insurance on the day of closing. I submit that health-contingent wellness is as silly as allowing the next homeowner to use the remainder of the policy you already bought.

So, back to the question: Is there a logical place for health-contingent programs? Surprise! – I say absolutely, and the impact would be strong and immediate.

The ultimate use for health-contingent wellness would be in workplace environments with “presumptive benefit” requirements for workers' compensation. Police, firemen and first responders in most jurisdictions are granted “presumptive” WC benefits for heart, hypertension, lung and related issues arguably connected to the stress of the job. Movements are in play to widen this distinction to include mental health disorders and cancers and to include other classes of public employees.

Mind you, any common private worker’s heart attack clam would be flatly denied by WC. While many a curmudgeon may lament the advent of “public servant” as an oxymoron, I say use the blessing of the ACA to skip the debate and level the playing field with health-contingent wellness.

Most public workforces have low turnover and retirement health plans. Therefore, investing in tomorrow’s health today is a justifiable hedge against real long-term risk. Also, and more importantly, presumptive benefits involve issues that can be mitigated by targeted condition-specific wellness programs. In this risk scenario, wellness investments can mitigate near-future WC costs. Controlling cholesterol, high blood pressure, weight, anxiety, smoking, alcohol, etc., is effective and constitutes money well spent. Health-contingent wellness would identify those with near- and long-term health risks and set them on a personal improvement plan with expected milestones. Targeted employees would have up to 30% of premium contribution at risk for noncompliance. The workforce, as well as the public, would be better served.

Editorial comment: I realize that engaging some public unions in health-contingent wellness presents a difficult collective-bargaining issue. However, I submit that these employees must consider public interest. They should not be able to have it both ways. One can’t argue the nature of the job as clinically connected to health conditions yet avoid known methods to mitigate the health risks of said conditions. One can’t enjoy a luxury of expanded WC benefits without personal responsibility for health. Besides, the ACA says it should be so!

Quick Tip – Consider The Spectrum In Choosing Your Wellness Approach

For many employers, participatory wellness makes the most sense. But don’t assume too quickly before making a critical assessment of your workforce.

Start from the extreme example of public employees with presumptive WC benefits and work backwards to find your risk level. Questions to ask include: Do you have low turnover? Do you have an aging workforce? Do you have retirement health obligations? Are there specific issues that you can identify impacting today’s workers’ comp costs, such as obesity, diabetes or other comorbidities? What are today’s health costs telling you about your workforce? Can you make a near-term dollar-savings case for addressing individual employees head-on in a health-contingent wellness program?

If you answered any with “yes,” then you may choose the route of health-contingent wellness. Approach this with precision. Manage health issues with proven programs and specific improvement expectations. My personal suggestion for vendor contracting is to install some mid-program “escape clause” if interim expectations and milestones are not met.

Common sense can prevail when it comes to wellness. Good luck!

Barry Thompson is founder and president of Risk Acuity and creator and operator of ClaimAnswer.com. This column was reprinted with his permission from the website's Quick Tips blog.