Employee Wellness

Working Out the Kinks

Companies that don’t invest in employee wellness programs may feel the burn in the form of rising health insurance costs

By Tom Nicholson

Ask contractors what market factors most concern them and they’ll probably talk about the rising costs of fuel, building materials and labor. Add increasing health insurance costs to that list.

Unlike the costs of oil, concrete and steel, contractors can take a proactive stance against skyrocketing insurance rates by implementing wellness programs to improve employees’ health and reduce medical insurance claims. With a growing number of contractors reporting substantial reductions in claims among their employees as the result of well-implemented worksite wellness programs, the trend is steadily becoming a mainstream business strategy.

Nowhere is this trend more apparent than at the Wellness Council of America, a nonprofit based in Omaha that for 20 years has provided education, assistance and guidance to firms planning to implement wellness programs. WELCOA President David Hunnicutt says interest in wellness programs among contractors is growing as fast as insurance rates are rising. “For the first 10 years of our existence, we were like the Maytag repairman, no one was calling us,” Hunnicutt says. “But these days, our phones are ringing off the hook.”

Rising health-care costs come in the wake of a “perfect storm” of social and economic conditions that include the influx of 80-million baby boomers upon the nation‘s health-care infrastructure and a $2.5-trillion health-care system that spends only 1% on prevention, Hunnicutt says. “Our health-care system is overburdened, a problem that’s not going away any time soon,” he adds. “But 25 to 50% of all health-care costs are potentially modifiable through wellness programs.”

Some wellness programs simply disseminate health information to employees; others involve screenings and incentives for those who show improvements in blood pressure, cholesterol, body-mass indexes or other indicators.

At the Des Moines, Iowa-based general contractor The Weitz Co., a wellness program created three years ago has already shown positive results. “The first two years, we didn’t see the return on the investment, but this year, we’ve seen a 2% reduction in our insurance costs,” says Chantry DeVries, benefits manager at Weitz.

DeVries says Weitz spends about $5 million annually for employee medical coverage and the 2% reduction adds up to about a $100,000 savings.

Principals at Weitz began thinking about wellness programs when “we realized our insurance rates had increased by double digits,” DeVries says. “If we didn’t address it, we couldn’t stay competitive.”

After searching for local health-care providers offering worksite wellness consulting, the company went through two providers before finally hiring Principal Wellness Co., Des Moines, to help it set up and institute a wellness program.

Formerly known as Molloy Wellness Co., Principal Wellness is now part of the Principal Financial Group and specializes in onsite health and wellness screenings and customized wellness program development for employers across the country.

Results-Based Programs

A key to Weitz’s success at reducing employees’ health claims is its wellness program’s results-oriented approach, Hunnicutt says. “Companies can create an activity-based program that encourages employees to exercise, or they can develop a results-oriented program that gives incentives for progress,” he says. But he adds that programs without results-based incentives “are almost guaranteed not to work.”

Contractor Cianbro Corp.'s wellness program includes classroom-type sessions by medical professionals to educate employees on ways to improve and maintain health.

At Weitz, employees who volunteer to participate in the program are given health screens and can be assisted by a private coach to address and improve specific health and fitness issues such as weight, cholesterol level and high-blood pressure. In exchange for participating in the program, Weitz increases its contribution to employees’ medical premiums from the standard 65 to 75%. Participants must show improved or sustained numbers on annual health-risk appraisals to earn the benefit.

A similarly robust program at Cianbro Co., a general contractor based in Pittsfield, Maine, has received industry praise as a model of how to reduce claims through a wellness program. Cianbro offers employees discounts of 10% or more on their medical premiums in exchange for participation in the program and demonstrably improved or sustained health indications.

Rita Bubar

Cianbro’s wellness program for its 1,800 employees includes an annual health-risk appraisal, a weekly newsletter and daily stretching for workers at jobsites, says Rita Bubar, the firm’s wellness manager.

“We are creating an environment where we are focused on health 24 hours a day,” Bubar says.

Under Cianbro’s program, employees who join the program agree to have a heath-risk appraisal and participate in health educational sessions and follow tailored exercise programs throughout the year.

Participants must show improvements during the annual health risk assessment on indicators such as cholesterol levels, blood pressure and body mass index to obtain the discounted premium.

Cianbro’s health insurance costs doubled from 1996 to 2001, prompting the firm to adopt a more aggressive program, Bubar says. Since then, “we have been able to reduce insurance rates from double-digit to single-digit increases,” she adds. Participants accrued an average savings of $1,600 per year on their medical premiums last year, Bubar says.

Through lunch-and-learn sessions conducted at jobsites, wellness programs are integrated into every aspect of company culture.

Return on Investments

Hunnicutt says there is a growing number of wellness program providers throughout the country, and while costs and services vary, there are three basic levels of service contractors should be aware of. At the lower end of the cost spectrum, providers offer services for $15 to $25 annually per employee and typically offer an annual health-risk assessment and heath information for dissemination to employees.

The next level of service, costing about $30 to $80 per employee, may include additional features such as coaches and walking programs as part of the package.

Contractors willing to invest $100 or more per employee can implement even more comprehensive programs that may include fitness coaches, health educators and speakers and ongoing assessments throughout the year. Bubar says Cianbro’s program costs about $200 per employee per year. “It’s expensive but you get what you pay for,” she adds.

What companies are getting are healthier employees and bigger returns on their wellness investments. “If it’s done right, you can see a return of about $3.83 for every $1 invested in the first 24 to 36 months,” Hunnicutt says.

For a smaller contractor who can’t make a big investment in a wellness program, lower-cost, activity-based programs can be useful. The Vancouver, Wash.-based contractor Nutter Construction Co.  started a wellness program earlier this year that consists of health evaluations, a nutrition class and weekly training sessions at a local gym for the firm’s 80 employees.

Most effective wellness programs include annual health-risk assessments, with information about how to improve indocators such as blood pressure and body-mass index.ealth.

“We just started this and are still bringing it up, but already I’m noticing the physical result with some significant weight losses and people who have quit using tobacco,” says Jeff Woodside, CEO at Nutter. “We spent about $20,000 to get the program rolling.”

While it’s not a results-based program, Woodside says he expects the program to pay dividends in a number of ways. “You get employees’ loyalty when you show you care about them, and that is a way to attract and keep good people,” Woodside says.

Legal Constraints

Since a results-based program gives an employer access to employees’ health screenings, some firms integrating aggressive programs into work places have encountered employee concerns about privacy. When Weitz started its program, “the first meetings weren’t fun,” DeVries says. “There was resistance at first, but we focused on the big picture, which is better health, and they warmed up to it. Now, 87% of employees are in the program.”

Bringing health-care professionals to the work place to conduct health assessments and follow-up information sessions encourages employees to participate in wellness programs.

DeVries says federal regulations stipulate that a firm cannot mandate participation in a program or access health data on individuals, although it may view health data in aggregate form. Denise Gold, associate general counsel for AGC, says while there are legal parameters for workplace programs, “these days, there are many wellness program packages offered by health insurance providers who should be taking care of the legal concerns.”

Good wellness consultants have strategies to help companies smoothly introduce and integrate results-based wellness programs, says David Atkinson, vice president at Dallas-based wellness consultant Cooper Ventures. “You have to meet employees where they are, you have to go into the field,” Atkinson says. “For blue-collar workers, especially in construction, employees will pay attention to safety, but not as much to health. Engagement is key. If you just put a program there and don’t engage the employees with it, it won’t work.”