Employees Need Bigger Carrot for Wellness Programs

October 28, 2008 - 3:36 PM
Jason Lucas wanted to snuff his pack-a-day cigarette habit, but not badly enough to pay for the stop-smoking drug Chantix.

Melissa Stevens, right, watches as Betty Jones weighs in during a weight watchers program at Monarch Beverages in Indianapolis, Sept. 2, 2008. (AP Photo/Michael Conroy)

Indianapolis (AP) - Jason Lucas wanted to snuff his pack-a-day cigarette habit, but not badly enough to pay for the stop-smoking drug Chantix.
 
Lucas heard good things about Chantix from his aunt. Still, the $150 monthly cost - not covered by insurance - seemed too steep until his employer, Monarch Beverage Co., offered to cover it.
 
"That was the horse that was walking by, and I jumped on him," the 29-year-old said. "That was just huge, huge for them to pay for it like that."
 
While workers enroll in benefits plans this fall, meaty incentives like these are growing as employers seek to boost participation in company-sponsored wellness programs.
 
Benefits experts predict another surge in popularity next year for these programs, even with a possible recession looming. Wellness programs aim to improve employee well-being with physicals, fitness guidance or other incentives to ward off future medical bills.
 
Companies will continue these wellness investments even in tough economic times because they're shifting more health insurance costs to the employee, and they need to offer incentives to keep workers healthy and productive, said Sue Willette, a partner with the human resources consulting firm Mercer.
 
But employers are learning they need to do more than just toss free water bottles at workers after they finish a health assessment. Experts say the keys to program growth include strong incentives like cash or health insurance discounts coupled with company encouragement.
 
For starters, employers should offer something. Participation in a health assessment, an initial step in many wellness programs, typically falls below 25 percent when it is voluntary, according to benefits consultant Towers Perrin.
 
Companies that offered $100 in cash five or six years ago for health assessment participation could expect about 75 percent of their employees to sign up. By 2006, that had fallen to around 50 percent for the same reward, said Jessica Grossmeier, research director for wellness program developer StayWell Health Management.
 
"I think you need a little bit more money now to get the same level of attention," she said.
 
The dollar doesn't buy what it used to. But more companies also have started linking incentives to things like a premium reduction. In those cases, the employer has to offer larger incentive amounts to grab attention, Grossmeier noted.
 
Gift cards and cash lured most Stimson Lumber Co. employees to its wellness program initially. But participation soared to 90 percent after the company dangled a health insurance rebate.
 
Employee Nancy Johnson saw her monthly premium shrink from about $180 to $36 after starting the program. She had a screening that included measuring her blood pressure and cholesterol, and she has to fill out a workbook on healthy behavior quarterly.
 
Discounts like that, she said, serve as a big motivator for her and nearly all of her 1,200 co-workers.
 
"The economy's so bad, and I need the money, and a year from now, my kid's going to be in college so I need to save everything I can," said Johnson, who works in the Oregon company's Idaho office.
 
Wellness participation doesn't rise and fall solely on the mighty dollar. It also depends on company encouragement.
 
"It doesn't matter, really, how much money you're offering if the culture isn't supporting what you're doing," Grossmeier said.
 
Towers Perrin has seen employer interest in wellness programs double in the past five years. It surveys hundreds of Fortune 1000 companies every year.
 
Many offerings are expected to become more common by next year, according to a separate employer study by Aon Consulting. The percentage of employers providing smoking cessation will increase to 55 percent from 46 percent.
 
Aon forecasts that 66 percent will offer health risk appraisals next year, compared with 48 percent this year.
 
Companies are turning to these programs more because they've squeezed all the savings they can out of their benefits programs, said Dave Guilmette, global health and welfare practice leader for Towers Perrin.
 
Monarch Beverages in Indianapolis runs or supports about a dozen wellness programs. The company spends about $100,000 annually on them, and human resources vice president Natalie Roberts swears they make back every penny.
 
"We've tried a million things," Roberts said. "We're not afraid to keep trying until we figure out what sticks."
 
Sick days used by the company's 630 employees have decreased. In 2004, 41 percent of the company's employees said they smoked. That total fell to 21 percent this year.
 
Monarch's list of non-smokers includes Lucas, the Chantix user. He hasn't taken a drag in more than a year.