HR Forum: health care costs

Showing posts with label health care costs. Show all posts

Develop a worksite obesity prevention program with new, free CDC tool

As a follow-up to our Monday post on how a lack of healthy snacks in the office are putting workers’ waistlines to the test, I wanted to share a new resource for businesses wanting to enhance their wellness program this year.

Yesterday, Ann Bares at Compensation Force spotlighted LEAN Works, a new online resource to help employers determine how much obesity costs their business each year.

LEAN Works is a new web-based resource developed by the Centers for Disease Control & Prevention (CDC) full of completely free interactive tools and evidence-based resources to help any organization develop an effective worksite obesity prevention and control program.

The site features an obesity cost calculator to estimate how much obesity is costing your company and how much you could save by using different workplace interventions.

LEAN Works also includes example presentations to help pitch your wellness program within your organization, tools to help collect employees’ baseline health information, workplace health audits and employee interest surveys.

Visit the CDC’s LEAN Works! Leading Employees to Activity and Nutrition.

Hiring, salary freezes to melt within the next year

A majority of U.S. employers plan to reverse some of the changes they’ve made to pay benefits and other HR programs, according to the latest survey results from Watson Wyatt.

The survey discovered that 62% of companies that made hiring freezes and 69% of companies that froze salaries plan to eliminate them within the next 12 months. Almost half (48%) of companies that reduced their employer 401(k)/403(b) matches also plan on reversing their decision within the next year.

Unfortunately, not all of the affected employer benefits will experience the same changes. One in five employers plan to keep salary reductions in place and 46% of employers do not plan on reversing the increases in the percentage that employees now pay for health care premiums.

"While more employers now feel the worst of the current downturn may be behind them, most are not expecting to go back to 'business as usual'," said Laura Sejen, global director of strategic rewards consulting at Watson Wyatt. "The challenge for companies will be to determine which cost-cutting changes can be reversed and which will become ingrained into the permanent business environment." (Yahoo! News)

In the next three to five years, companies expect staffing issues including difficulties in attracting and retaining skilled employees to extend long-term. They also expect staff sizes to be significantly smaller than pre-economic levels.

Compared with pre-economic crisis levels, the companies surveyed expect the following changes within the next three to five years:

45% foresee difficulty retaining critical-skill employees
41% expect increased difficulty attracting critical-skill employees
50% expect no increase to current salary levels
52% expect to see a decrease in staff sixes
76% expect no change in employer contributions to defined contribution plans (e.g., 401(k))

The survey also found that nearly one quarter (24%) of the companies surveyed believed their results have “bottomed out,” double the number of survey participants that said the same in April.

"Laying off workers and cutting back on pay and benefits are never easy decisions to make. Now, companies are now looking to the new economic landscape that lies ahead," said Laurie Bienstock, U.S. strategic rewards leader at Watson Wyatt. "The challenge for employers is to reassess short-term cost cuts and ensure they have the right workforce and resources in place to meet the organization's long-term financial goals." (Yahoo! News)

Employers brace for 2010 healthcare cost hike

It’s estimated that U.S. employers will see a 9 percent jump in healthcare costs in 2010 and workers will be footing more of the bill, according to an annual trend report by PricewaterhouseCoopers (PwC).

The annual medical costs trends report also revealed that workers are more likely to utilize their health insurance coverage out of fear that they will loose their jobs. More uninsured and underinsured people are expected to turn to Medicaid for health coverage.

The rise in healthcare costs may be offset partially by cost declines associated with U.S. health care reforms and the potential for high deductible health plans and wellness programs, according to PwC.

Of the 500 employers surveyed by PwC:   

42% plan to increase their workers’ share of healthcare costs in 2010, and
41% said they would change the design of health care plans to increase medical cost sharing.

The study comes at a time when new health-reform legislation is heating up congressional hearings. President Obama has pledged to push his plans to revamp health-care regulation through Congress and Senate hearings this summer. Before anything is approved, it will be up to employers to manage rising costs.

"Employers are squeezing dollars out of their programs to save money," Mike Thompson, principal at PricewaterhouseCoopers global human resource solutions group, said in a statement.

"As the economy recovers, employers will refocus on more sustainable longer term approaches to medical cost containment based on an increasingly shared interest between employers and their workers." (Reuters)

What is your company doing to offset the rise in healthcare costs? Please leave a comment and let us know.

IRS answers more pressing COBRA questions

If you’re an employer struggling with COBRA questions, the Internal Revenue Service (IRS) has published added guidance on the federal premium subsidy to help answer some of the most common issues.

The new COBRA regulations, which were part of President Obama’s American Recovery and Reinvestment Act of 2009, contain specific changes to COBRA health benefit requirements that affect former employees, their employers and COBRA coverage providers.

Under the subsidy, involuntarily terminated employees must pay 35 percent of the COBRA premium and employers must front the money for the remaining 65 percent. After paying insurers directly, employers can then claim the payment as an offset against payroll tax liabilities using the updated Form 941.

The IRS published information earlier this year to answer major questions from the public regarding eligibility for the COBRA subsidy. Information has been added to the question-and-answer style document as new questions develop.

Last week, the IRS updated the online document with additional information including guidance on whether an employee who is a reservist would be eligible for the subsidy if called to active duty.

Q. Does an involuntary termination of employment occur if a member of a military Reserve unit or the National Guard who is employed by a civilian employer is called to active duty?

A. Yes. This is the case regardless of whether the civilian employer otherwise treats the employee’s absence as a termination of employment or a leave of absence.

The IRS also added information in response to questions regarding elected officials and employees hired for a limited period of time.

Q. In the case of an employee who is hired only for a limited period, such as a seasonal worker, or a teacher hired only for one school year, can the end of employment at the end of the period be considered an involuntary termination?

A. Yes. Under Notice 2009-27, Q&A-1, an involuntary termination may include the employer’s failure to renew a contract at the time the contract expires, if the employee was willing and able to execute a new contract providing terms and conditions similar to those in the expiring contract and to continue providing the services. Thus, if an employee hired for a limited period works to the end of the period, is willing and able to continue employment, and terminates employment because of the failure of the employer to offer additional work, an involuntary termination occurs for purposes of the premium subsidy.

For more answers to questions on COBRA continuation health coverage read the IRS FAQs for employers.

DOL seeks public comment on mental health parity law

The U.S. Departments of Labor (DOL), Treasury, and Health and Human Services (HHS) published a request for information (RFI) in the April 28 Federal Register asking for public comments regarding the Mental Health Parity and Addiction Equity Act of 2008.

The mental health parity bill was signed into law in October 2008, ensuring better insurance coverage for mental health treatments. The law requires health care plans to provide equal coverage of mental and physical illness.

Before the bill was signed, insurers could set high co-payments and deductibles and stiff limits on treatment for mental illness and addiction disorders.

The government is now seeking information and advice from the public regarding the best ways to implement the new rules for group health plans.

The public is encouraged to share comments on issues including:

The types of financial requirements or treatment limits currently set by health plans.
How certain terms in the statute could be clarified to make compliance easier.
Health plans’ current disclosure practices regarding medical necessity determinations and denial of medical coverage.
Current health plan practices concerning out-of-network coverage for mental health benefits.

Public comments may be submitted by mail, through the Federal eRulemaking Portal (http://www.regulations.gov), or by sending an e-mail to E-OHPSCA.EBSA@dol.gov. Comments will be accepted through May 28, 2009.

Wellness programs stay strong despite recession

Despite the recession, companies continue to add wellness and health-management programs to reduce costs while encouraging employees to improve their physical health.

The latest Watson Wyatt/National Business Group on Health survey discovered that companies are still adopting employee wellness programs. The survey results also revealed that many companies improved employee participation rates by offering workers financial incentives.

Survey results show how companies increased the availability of various wellness programs:

58% of companies offer lifestyle improvement programs, up from 43% in 2007
56% offer health coaches, up from 44% in 2007
52% offer weight-management programs, up from 42% in 2007
80% offer health-risk appraisals, up from 72% in 2007

Companies that encouraged employees to participate in wellness programs by offering financial incentives reported significantly higher participation rates, according to survey results. Only 40% of companies reported that less than 5% of their workforce participated in weight-management programs.

"Employers continue to see gains from promoting wellness and health management initiatives," said Scott Keyes, senior group and health-care consultant at Watson Wyatt. "Effective financial incentives are one of the keys to encouraging worker participation in these programs — an effort that not only improves the health of workers but also helps reduce costs."

The survey also found that motivating employees with financial incentives significantly increased participation rates. Currently, 61% of employers offer incentives for health-risk appraisals and many employers are also offering incentives for smoking cessation and weight management programs.

Using financial incentives between $51 and $100 have been successful in encouraging employees to participate in smoking cessation programs, weight-management programs, and encourage employees to receive biometric screenings, according to the results.

"The relationship between the amount of the incentive and the level of program participation among employees is strong," said Sherri Potter, senior group and health-care consultant at Watson Wyatt. "A properly structured incentive program does much more than protect investments in health management; it creates a healthier and more productive workforce."

For more information on employee wellness programs and employee health, read these past posts:

Obesity linked to more expensive workers’ comp claims

HR survey reveals top green business practices

New research suggests exercise makes you smarter

Economic stress impacts employee health, productivity

How to beat stress in the workplace

Employees hit the road for National Start! Walking Day, tomorrow April 8

Thousands of Americans will bring along a pair of sneakers to work tomorrow and embark on a new journey to fitness that starts with one 30-minute walk.

The initiative is part of the American Heart Association’s National Start! Walking Day, a nation-wide effort to get more people of all physical ability levels on the path to wellness.

The American Heart Association chose walking as the main activity in their program because it’s the most accessible, affordable and successful of any type of exercise routine.

"With over 66 percent of Americans considered overweight and obese and nearly 70 percent of the population not engaging in regular light to moderate physical activity five times a week or vigorous activity three or more times per week, we realized there was a dire need to incorporate more walking into people's daily routines," said Timothy Gardner, M.D., American Heart Association president. "Just a few extra steps each day is a simple and easy way to take an active role in maintaining a significantly healthier life."

Research has proven that walking programs have the lowest dropout rate of any physical activity and are the most effective method to get employees to exercise during the workday without hurting productivity, according the the American College of Sports Medicine.

“It’s good business to have physically fit workers,” says David Josserand, executive vice president and chief strategic officer of The Dalton Agency in Jacksonville, Fla., and 2008-2009 national chairman for the American Heart Association.

“A recent four-year sutdy reported in the Journal of Occupational and Environmentla Medicine found that employers can save $1.65 in healthcare expenses for every dollar they invest in fitness programs. Reducing just one health risk in a workplace can increase productivity by 9%,” Josserand said in a Forbes magazine article (pdf).

In addition to healthcare savings, studies also suggest that implementing a workplace physical activity program can help companies reduce absenteeism and lower turnover rates.

Businesses can register for the Start! Fit-Friendly Companies Recognition Program, which recognizes employers who advocate the health of their employees and work to create a culture of physical activity in the workplace. Nearly 1,000 companies were designated Fit-Friendly since the program was launched in 2007.

Participants in the Start! Fit-Friendly Companies Recognition Program are given free access to program resources, including materials to promote employee wellness programs, internal newsletter templates and consultation on CPR/AED programs.

Encourage employees to wear their sneakers to work tomorrow and take a 30-minute walk outside. Even if you can't pull things together to get started tomorrow, set a date in the near future and put your company on the road to wellness.

You can find free, downloadable walking plans and a list of walking paths in various cities at startwalkingnow.org.

Related posts:

Obesity linked to more expensive workers’ comp claims

Economic stress impacts employee health, productivity

Employee wellness best practices: Offset the rise in health care costs

Rising health care costs motivate employee wellness programs

DOL issues model COBRA notices for employers

Late last week the Department of Labor (DOL) issued four model notices that employers can use to explain federal premium subsidies available under COBRA.

As part of the economic stimulus plan President Obama signed into law in February, employees who were involuntarily terminated between September 1, 2008, and December 31, 2009, are eligible to retain their group health coverage for a period of up to nine months by paying a portion of the COBRA premium.

Involuntarily terminated employees must pay 35 percent of the COBRA premium and employers must front the money for the remaining 65 percent. Employers will pay the insurer directly, then claim it as an offset against payroll tax liabilities. Payroll will then report any subsidies and take the offset on an updated Form 941.

"Our action today gives workers and their families useful information on their right to receive the COBRA subsidy and makes it easier for employers and plans to meet their notice obligations. Given the current economic situation facing dislocated workers and their families, it is very important that individuals do not lose their group health coverage," said Alan D. Lebowitz, deputy assistant secretary of labor for the department's Employee Benefits Security Administration (EBSA).

Employers can send the DOL’s model notices to COBRA beneficiaries advising them of the subsidy and how they can enroll for coverage.

Designed to fit different situations, the four COBRA model notices include:

A general or “full” notice to be given to beneficiaries who lost group coverage between September 1, 2008, and December 31, 2009.
An abbreviated general notice that would be for beneficiaries who are currently receiving unsubsidized COBRA.
An alternative notice explains the right of individuals working in states with continuation coverage laws, or “mini-COBRA” laws, which apply to employers with fewer than 20 employees.
A notice of extended election periods for eligible individuals who lost their jobs before the stimulus plan was signed into law, between September 1, 2008 and February 16, 2009, and declined or discontinued COBRA coverage at the time.

Each package includes information of the premium reduction provisions, a series of questions and answers, and which forms to use in requesting the premium reduction or COBRA coverage.

More information on the COBRA subsidy:

Obesity linked to more expensive workers’ comp claims

Data released earlier this month indicates that obesity is having an increasingly larger impact on workers’ compensation claims and workplace safety efforts.

Workers’ comp medical claims involving obese claimants open for one year can be up to three times as costly than those involving healthier employees, according to preliminary findings released by the National Council on Compensation Insurance (NCCI).

Claims that remain open for five years can be five times as expensive and the extra treatments related to obesity involved in some “smaller claims” can exceed almost 30 times the cost of treating a non-obese individual, according to NCCI.

Studies have shown that along with obesity, the heath care costs associated with employees who smoke and with conditions such as diabetes and high blood pressure can be significantly higher than healthy employees.

In addition to mounting health care costs, the cost of work-related injuries in the U.S. totals more than $50 billion a year. Though the costs are high, a growing number of business have been taking their chances with employee safety by cutting vital OSHA safety training out of the budget in the wake of the recession.

The combination of unhealthy employees and more businesses cutting safety training corners has the potential to add even more financial stress to organizations that are already feeling the pressure.

Employers can take a comprehensive approach to combating both rising health care costs and more expensive workers’ comp claims by promoting the importance of employee wellness and workplace safety.

Employer-sponsored wellness programs can help employees take that first step to improving their health. Find a gym to partner with that can give you a good deal on memberships for employees or bring health specialists in-house to train employees on the benefits of wellness.

As the economy continues to challenge businesses, more are searching for inexpensive safety training methods to save money and limit the number of workplace injuries that can lead to costly workers’ compensation claims.

G.Neil is meeting that challenge with new products that make employee safety training and OSHA compliance easier and affordable. With the right tools, it’s possible to keep workers safe and healthy without jeopardizing your budget.

IRS releases info to help employers claim COBRA credit

The Internal Revenue Service (IRS) has released detailed information that will help employers claim credit for the COBRA medical premiums they pay for their former employees, a measure contained in President Obama’s economic stimulus package passed last month.

Employers will find a comprehensive set of questions and answers at IRS.gov, in addition to a revised version of the quarterly payroll tax return employers must use to claim credit for COBRA medical premiums paid for former employees.

Beginning with the first quarter of 2009, the Employer’s Quarterly Federal Tax Return, Form 941, is the form used to claim the new COBRA payments credit.

“This is the first step in our effort to provide employers with information on this important health benefit for people who have lost their jobs,” said IRS Commissioner Doug Shulman. “We will continue our work in the weeks ahead to help employers implement this crucial change for the nation’s unemployed.”

In February, President Obama signed the American Recovery and Reinvestment Act of 2009. The new law contains specific changes to COBRA health benefit requirements, changes that affect former employees, their employers and COBRA coverage providers.

Under the new law, eligible former employees, enrolled in their employer’s health plan at the time they lost their jobs, are required to pay only 35 percent of the cost of COBRA coverage. Employers must treat the 35 percent payment by eligible former employees as full payment, but the employers are entitled to a credit for the other 65 percent of the COBRA cost on their payroll tax return.

The IRS notes that employers must maintain supporting documentation for the COBRA credit claimed, including:

Documentation of receipt of the employee’s 35 percent share of the premium.
In the case of insured plans: A copy of invoice or other supporting statement from the insurance carrier and proof of timely payment of the full premium to the insurance carrier.
Declaration of the former employee’s involuntary termination.

Visit the Department of Labor for more information about COBRA payments and read another HR Forum post on the subject: Stimulus plan subsidizes COBRA, expands unemployment insurance.

Cash incentives help employees quit smoking

Smokers are more likely to quit if they are offered a cash incentive, according to a new study offering the strongest evidence tying monetary rewards to behavioral changes.

The study, led by a team from the University of Pennsylvania and published by the New England Journal of Medicine, is one of the largest of its kind.

Researchers tracked 878 General Electric Co. employees from across the U.S. for 18 months in 2005 and 2006. Each employee involved in the study smoked an average of one pack of cigarettes a day. They were divided into two groups and all received information regarding smoking-cessation programs.

Members of one group received cash incentives for completing each step of the program: $100 for finishing a smoking-cessation course, $250 if they quit smoking within six months, and $400 for continuing to not smoke for another six months.

Almost 15% of the group who were offered money to stop smoking had quit within the first year of the study, only 5% of the other group had done the same. At the end of the 18-month study, 9% of the paid group was still not smoking compared to only about 4% of the non-paid group.

From the Wall Street Journal article:

Loretta Massie-Eaton, a 53-year-old administrative assistant who works for GE in Atlanta, said encouragement from her 14-year-old son, Harrison, was the main reason she decided to participate. But money was also a motivation, she said. "It was the satisfaction of sticking to the commitment and getting reimbursed for doing it," said Ms. Massie-Eaton, who says she hasn't had a cigarette since taking part in the study more than two years ago.

Ric Barton, a GE lighting specialist from Cleveland, said he had been thinking about quitting before the study. A smoker for four decades, the 62-year-old said finding places to light up had become increasingly difficult and he was tired of rising cigarette prices. "It was icing for me to get a monetary reward for something I was already planning to do," Mr. Barton said.

Statistics show that helping employees quit smoking is worth the investment for companies. Smoking costs employers $3,400 per smoking employee per year in health-care bills, reduced productivity and absenteeism, according to the Centers for Disease Control and Prevention (CDC).

Researchers not involved in the study commented that the latest findings show that incentives work and give employers hard evidence that incentive programs can help companies save money on employee health-care costs.

“You’d prefer not to pay them, but it’s worth it,” said Helen Darling, president of the National Business Group on Health professional organization.

Related posts:

Help employees quit smoking, participate in the Great American Smokeout

Workplace smoking policies: When employees lie

New research suggests exercise makes you smarter

We know that regular exercise can help the human body ward off a slew of physical ailments including heart disease, obesity, certain types of cancer, diabetes and hypertension. Now, along with the benefits to our bodies, new studies show that exercise can be just as beneficial to our brains.

Until recently, the only link scientists had to connect exercise and brain function was the fact that aerobic activity increases the amount of oxygen flowing to the brain and nourishes brain cells. A recent study is suggesting that exercise helps brain cells form new connections, increasing the brain’s capacity for knowledge, according to an article at HRGuru.

Neurologist Scott Small from the Columbia University Medical Center and Fred Gage of the Salk Institute co-authored the study that illustrates how exercise could improve our ability to learn and develop.

Here’s a breakdown of what happens to your brain as you exercise:

As you exercise, your muscles contract.
This releases chemicals, including a protein called IGF-1.
IGF-1 travels to the brain and stimulates the release of several chemicals, including brain derived neurotropic factor (BDNF).
Regular exercise increases levels of BDNF.
BDNF stimulates neurons (brain cells) to branch and connect in new ways.
New junctions between neurons are the basis of learning.

“Bodies that exercise regularly stimulate brains to have higher levels of BDNF; brains with higher levels of BDNF have greater capacity for knowledge,” explains author Kristin Wehner, “Healthy & Wealthy” columnist at Entrepreneur.com.

If you’ve been looking for more reasons to encourage employees to start exercising, you can now add knowledge to the list. It may involve a small investment, but promoting exercise with an employee wellness program will pay itself back in reduced health care costs, a boost in productivity, and an even smarter workforce than what you have now.

Obama on labor law: Preparing for change

As President-elect Barack Obama prepares to take his place in the White House, businesses across the country are considering what impact his plans will have on their organizations in the coming years.

In our existing unpredictable market, businesses should be prepared for impending changes related to wages, immigration, taxes, health care, executive compensation and benefits, civil rights and an inevitable increase in worker unionization, according to Littler Mendelson, the nation’s largest employment and labor law firm representing management, in a recent article.

“The combination of President Obama, with an electoral mandate for change from the voters, large Democratic gains in both houses of Congress, and the declining economy, sets the stage for a wave of legislative and regulatory proposals intended to protect workers in these troubled times,” Jay Sumner, a Washington, DC-based attorney at Littler said. “In the first 100 days and over the next four years, American businesses should anticipate significant changes.

“Those companies that educate themselves and prepare to navigate the changed labor and employment landscape will survive and prosper, and they should have a competitive edge over those that are caught unprepared,” said Sumner in a recent Seacoastonline.com article.

Here are the most important employment law issues we’ll be watching after Obama takes office in 2009:

Unions - The Employee Free Choice Act (EFCA), designed to make it easier for unions to organize, is the top item on the labor agenda. Obama has already pledged to sign EFCA into law once passed.

Health care - Experts predict that the Obama Administration will explore avenues to keep the current employer-provided health care system in place. Obama’s health care plan would require employers to provide health care benefits or pay a percentage of payroll to support public health care.

Immigration - The new administration will push to increase enforcement of immigration laws and hold negligent employers accountable for disregard of immigration laws and employing undocumented workers. Obama is likely to agree with past proposals requiring government contractors to use E-Verify and could extend the program if accuracy and funding issues are settled.

Minimum Wage - Obama has pledged to increase minimum wage and index it to inflation.

Time off - The Obama Administration wants to expand the Family and Medical Leave Act (FMLA) to cover smaller employers, those with 25 or more employees, and permit leave for more reasons. Obama and Congress are also considering paid FMLA leave, mandatory sick leave and flexible work arrangements.

President signs mental health parity into law

A new law included in the economic bailout bill President Bush signed on Friday, will ensure more than one-third of Americans better insurance coverage for mental health treatments.

The mental health care benefits parity legislation will require health care plans to provide equal coverage of mental and physical illness. In the past, insurers were able to set higher co-payments and deductibles and harsh limits on treatment for mental illness and addiction disorders.

According to Workforce Management:

For example, plans no longer will be allowed to limit the number of annual outpatient visits for treatment of mental disorders while not imposing a comparable limit on the number of outpatient visits for other medical problems.

While the plan changes would be extensive, the cost impact is expected to be modest. The Congressional Budget Office last year estimated that enactment of a similar bill would boost health insurance premiums by an average of about 0.2 percent a year.

A result of 12 years of advocacy, the new law is described as “a milestone in the quest for civil rights, an effort to end insurance discrimination and to reduce the stigma of mental illness,” according to The New York Times.

The law will be effective for most health care plans on January 1, 2010. Businesses with 50 or fewer employees are exempt.

Related post:

Mental Health Parity Bill passes House, on to negotiations

San Francisco court upholds universal health care plan

Earlier this week, federal judges ruled to uphold a health care ordinance giving San Francisco the right to make employers help pay part of the cost of the city’s universal health care plan.

“City officials and labor unions said the ruling establishes San Francisco as a model for state and local health coverage in the absence of a nationwide universal health plan,” according to the SFGate.

The city’s plan, called Healthy San Francisco, is the first of its kind in the nation and “could set the stage for a test of the supremacy of a longstanding federal labor law.”

Healthy San Francisco will help the city provide care for an estimated 73,000 uninsured residents, about 30,000 residents have already signed up.

Under the plan, companies with more than 20 employees that do not offer insurance to their workers must contribute $1.17 to $1.76 per employee per hour for health care.

Employers may choose to pay the money in a number of ways, including health care savings accounts, employer-provided insurance, employee reimbursement or contributing directly to Healthy San Francisco.

From The New York Times:

Mayor Gavin Newsom, a former restaurateur, said that his administration recognized that some extra expense was falling on businesses but that he was proud the city was a trailblazer.

“By thinking outside the box,” he said, “every city and state in this country can provide health care if they are willing to challenge the conventional wisdom.”

Some of San Francisco’s well-known restaurants have added small fees to bills, often with a note explaining that the charge goes to pay for health care.

Mr. Scherotter, who runs an Italian restaurant, adds such a fee. He said the law had added to his costs and his administrative workload. “It’s a lot of tedious arithmetic,” he said.

Employee wellness best practices: Offset the rise in health care costs

Health care costs are projected to rise more than 10 percent next year, according to a survey of insurers by Aon Consulting Worldwide.

While the double-digit rise may seem large, it’s actually the smallest increase Aon has seen in the past six years, hinting that employee wellness programs may be paying off.

If you want to offset the rise in health care costs, business should spend more money on employee wellness programs, according to a Workforce Management article from earlier this year. Health care industry experts suggest that companies that have implemented wellness programs have seen lower health care costs.

“CFOs have always viewed health care as an expense, but rarely as an investment” said Jerry Ripperger, director of consumer health at the Principal Financial Group. “But improving the health of your employee base, rather than simply providing reimbursements, is an exercise in risk management with a true ROI.”

Companies that have implemented employee wellness programs have seen an average reduction of $2.45 in medical claims for every dollar spent developing the program, according to a recent Principal study. Most companies started seeing results after about 18 months and the longer a wellness program is in place, the more health care costs can be reduced, according to Ripperger.

The Wellness Council of America, an organization devoted to employee wellness programs, has developed seven employee wellness best practices. To develop and maintain a program in your workplace, follow “The Seven C’s” for success:

Capturing CEO Suport
Creating Cohesive Wellness Teams
Collecting Data To Drive Health Efforts
Carefully Crafting An Operating Plan
Choosing Appropriate Interventions
Creating A Supportive Environment
Carefully Evaluating Outcomes

Download a free copy of WELCOA’s Seven Benchmarks of results-oriented workplace wellness programs.

More sick employees reporting to work

Financial pressures are a big reason more sick employees are reporting to work, even if they have paid sick leave, according to a new poll of two presidential swing states.

National Public Radio, the Kaiser Family Foundation and Harvard School of Public Health compiled Heath Care and the Economy in Two Swing States: A Look at Ohio and Florida, examining how financial issues have affected citizens in the two presidential swing states. Soaring health care costs and medical bills have taken a bite out of family finances, forcing people to report to work even though they may be ill.

Of those surveyed, 44% of employees in Florida and 50% in Ohio go to work sick because they’re worried about the financial consequences went to work sick.

“The general level of economic anxiety that workers have today, I think, is evident in these polls, and employers might want to be cognizant of their workforce being very worried about paying their bills,” Kaiser’s vice president of public opinion and survey research Maryann Brodie told SHRM Online.

The data, she added, “should make everyone pause and think how this economy and economic anxiety are affecting the people around them and the people who are working for them.”

Rising health care costs motivate employee wellness programs

Employer health care costs are predicted to rise almost 10% in 2008 and another 10% in 2009, according to a study released this week by PriceWaterhouseCoopers.

The increase is due to two main factors:

A hospital building boom, as hospitals replace facilities and add more private rooms and centers for outpatient treatment.
An increase in the expenses those with insurance are paying for those without. The federal government underfunds public insurance programs and the number of people with private insurance continues to decrease.

Along with health care costs, the number of underinsured Americans continues to grow. The number of American adults who had inadequate health insurance to cover their medical expenses rose 60% from 2003 to 2007. In the U.S., there are currently more than 25 million people underinsured.

In response to increasing costs, more employers are focusing more on employee wellness programs as an attempt to improve overall company health.

Studies have shown that walking programs are the most effective way to get employees to exercise without hurting productivity, according to a presentation at the American College of Sports Medicine.

Here are some tips to create your own wellness program that employees will want to stick with:

Create small, attainable exercise goals. Wellness programs with achievable fitness goals are more effective in helping sedentary adults start and stick with fitness programs than those with more challenging fitness goals, according to the American College of Sports Medicine presentation.

Give employees pedometers. Pedometers are a low-cost, simple and non-invasive way for people to increase their awareness of their daily activity and improve their overall fitness level. Those who were given pedometers in the research study said they plan to continue wearing the device after the study was over.

Get everyone involved, including upper management. Get the executives in the office involved in the program and encourage them to lead by example. When employees know that upper management is on board, they may be more inclined to participate.

Make it fun. Create T-shirts and hand out water bottles to everyone who gets involved. Post fliers promoting each walking event and create some buzz around the office.

Senate passes genetic nondiscrimination bill

Anti-discrimination legislation is on the move that would protect employees’ jobs and health insurance coverage against decisions made on the basis of genetic information.

On April 24, 2008, the U.S. Senate unanimously approved the Genetic Information Nondiscrimination Act, or GINA.

GINA will:

prohibit the use of genetic information to deny employment or insurance coverage,
ensure genetic test results are kept private,
and prevent insurance companies from making eligibility or premium decisions based on genetic information.

The act will now go back to the House of Representatives for final approval. It is then on to President Bush’s desk, who is expected to sign the bill as early as next week. The bill's effective date will be 18 months after the President signs.

Check back often for updates on the status of GINA and whether there will be posting changes once the bill is signed into law.

Read the full Associated Press article.

Workplace smoking policies: When employees lie

Whirlpool suspended 39 workers for lying on insurance paperwork about their smoking habits, as reported by the Chicago Tribune.

The suspended employees all claimed they do not use tobacco products, but were caught in the act on the Evansville, Indiana, factory property smoking or chewing tobacco. Some accused workers may even lose their jobs because of the lies.

Whirlpool uses a financial incentive program to encourage workers and their families to not smoke. Workers at the Evansville factory who smoke are charged an extra $500 in annual health insurance premiums.

Whirlpool’s actions show one difficulty companies encounter when enforcing wellness programs based on the honor system.

"Employers have been using the honor system ever since wellness programs started, and you have to be a little naive to think that people are going to admit they smoke when they know they're going to be penalized."

Enforcing smoke-free workplace policies can be tough, especially if employees are untruthful about their smoking habits.

With rising healthcare costs and the dangers of second-hand smoke, some companies are completely snuffing out smoking on company property.

“No Smokers in the Workplace: The New Controversy,” from G.Neil’s News & Info section, examines how some workers are fighting back against smoke-free policies with legal action. Some workers’ rights groups claim the policies violate one’s right of free expression.

State no-smoking laws can stir up confusion when determining if your company should enact a smoke-free policy. For help on how to sort through related legal issues, read the full article at G.Neil.com.

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