Looking out for your employees’ health can mean looking out for your bottom line. You’ve probably heard how huge companies like Google and Microsoft offer unbelievable employee perks, including wellness programs with everything from on-site gyms, to chiropractors, and massages. You may not be able to provide your employees with “nap rooms” and in-house chefs, but you can still offer a smaller-scale version of a workplace wellness program. These programs may help you reduce healthcare costs and create a happier, more productive workplace, as long as you follow the rules laid out by the Affordable Care Act.
What Is a Workplace Wellness Program?
A workplace wellness program encourages employees to live healthier, fitter lives. Some insurance companies offer them, and some are completely designed by employers. It’s no secret that our country is dealing with multiple health issues like diabetes and obesity epidemics. Offering incentives for employees to look after themselves can help to keep rising healthcare costs down. These programs combine things like:
- Health screenings
- Programs to quit smoking
- Diet and weight loss programs
- Diabetes management programs
- Monthly seminars
Employers can reimburse employees for gym memberships or even offer rewards like cash or reductions in their health insurance premiums.
Types of Workplace Wellness Programs
There are lots of different ways you can implement a wellness program, but generally there are two types. These are:
- Participatory wellness programs – these programs are the ones that generally include seminars and health screenings offered at work, or reimbursements for gym memberships. They might not offer a reward for participation, or, if they do, employees will not have to meet any goals or conditions to get the rewards.
- Health-contingent wellness programs – employees who participate in these need to meet specific goals to get their reward. They can either be activity-based or outcome-based. For example, employees could commit to walking a certain amount per week (activity-based), or employees could reach a goal of quitting smoking or reducing their BMI (outcome-based).
The second type of program is a little more controversial since they could exclude some employees who have physical limitations that would make it hard to participate. So are there rules for these programs? Yes. The Affordable Care Act (ACA) lays out guidelines for how they can be used.
Wellness Programs and the ACA
The ACA is on board with the use of workplace wellness programs: it actually created incentives for employers to use them. If an employer decides to offer a health-contingent program, employers can offer a reward that is equal to up to 30% of the total cost of medical coverage (including both employee and employer contributions). That amount goes up to 50% for programs that help employees quit smoking.
This 30% limit is one of the rules put in place by the ACA. There are other regulations, as well. For example, employers need to give an opportunity to get a reward at least once a year, and the full reward needs to be offered to everyone fairly.
This brings us to one of the main rules. In order to be fair and not discriminatory, “reasonable alternatives” have to be offered to employees who cannot participate in the same way as others because of a medical condition. Employees in an activity-based program need to be offered an alternative activity if, say, they are pregnant, ill, or have recently had surgery. And, if an employee in an outcome-based program doesn’t meet their goal, they need to be offered a way to still get their reward, perhaps by working with a health coach.
Why Have a Workplace Wellness Program?
According to the Centers for Disease Control (CDC), almost half of all companies in the U.S. offer some type of health promotion or wellness program. There must be a reason why so many employers, large and small, are giving employees access to these programs. And there are studies that show the benefits go beyond employee satisfaction. Wellness programs can make sense financially for employers, even those running small businesses. Some of the reasons to consider one include:
- Some insurance companies offer discounts on premiums for employers and employees that participate in wellness programs
- Some studies claim that these programs can actually change employee behavior surrounding their health. While it’s hard to fundamentally change people, offering them education, motivation and social support (as well as concrete things like gym memberships) might help them to live healthier lives. They might quit smoking, lose weight or lower their cholesterol, all of which would lower their risks of serious health problems. And being healthier obviously means lower healthcare costs. In fact, the journal Health Affairs found that medical costs fell by $3.27 for every dollar spent on wellness programs.
- Healthier employees not only have fewer costly health problems, but they may also be more productive. A study by the journal Popular Health Management found that smokers, people with unhealthy diets, people who don’t exercise, and those with chronic pain are actually less “present” at work, which could be costing employers money.
- Other studies show that healthier employees miss fewer days of work. The study by Health Affairs found that absenteeism costs fell by $2.73 for each wellness dollar spent.
- A workplace wellness program could help you to attract more employees, and might help you keep the ones you have. Offering extras like gym memberships or lower insurance premiums can differentiate you from other employers.
Workplace wellness programs can boost your employees’ health, make your business more productive, and help reduce your healthcare costs. Provisions in the ACA allow you to give rewards to your employees for looking out for their health, but you need to be careful about how you offer those incentives.