Employers continue to experience a rise in the cost of providing health coverage to employees, despite health care reform under the Patient Protection and Affordable Care Act (PPACA). Whether that will change when the new law is fully implemented remains to be seen. For the time being, however, employers continue to struggle with escalating costs and many are looking to wellness programs as part of the solution.

1303029Congress seems to agree. Under the PPACA, beginning in 2014, employers can increase the wellness incentive they provide under their group health plans from 20% to 30% of premium. The new law also provides for information gathering and funding to study wellness programs with an eye toward enhancing their effectiveness.

Even before health care reform, many looked to wellness programs as an important tool for helping to bend the health care cost curve by getting employees more educated about their own health and their health care options, and by providing incentives to encourage healthier behaviors. Competing statistics concerning wellness programs effectiveness exist for sure, although common sense certainly seems to support providing people with services, tools and/or resources to help them move away from unhealthy behaviors, such as smoking, to healthier behaviors, such as exercising, taking medications as prescribed, and eating right.

The success of any wellness program depends on three things – participation, participation and participation. You could design the best program for your employees and if, for example, they can not trust that their personal information will be maintained privately, participation likely will be low. Likewise, if rank and file employees do not see management participating or cannot understand the program, they might be less inclined to participate.

So what are some tips for designing/driving participation in your wellness programs:


1. Support from the top.

In our experience, having top management out in front of the company’s wellness initiatives is a significant driver of wellness program participation. If those at the top do not engage, it sends a strong message to employees that maybe this program is not worth the effort, or that the program is more about reducing costs than is it about improving health. Leadership here is critical.

2. Create a culture of health.

Few doubt a significant driving force behind wellness programs is to reduce the cost of providing health coverage to employees. The companies that seem to have successful wellness programs, however, are those that also are motivated to improve the health of their workforce. The rewards here could be huge – lower health care costs, lower rates of absenteeism, increased productivity, fewer workers compensation claims, fewer and shorter disability leaves of absence, increased employee morale, and so on. This is more likely achieved through creating a culture of health at the workplace, rather than a one dimensional wellness program, such as offering solely a health risk assessment.

Companies considering a wellness program often want to address a range of health issues through a multi-faceted program that includes such features as – smoking cessation, screenings, incentives to reduce weight/body mass index (BMI), cholesterol, blood pressure and so on. However, whether to roll out the entire program at once or start small is frequently a decision point for companies. There are concerns about cost, administration, employee reaction, and others.

On the one hand, rolling out a tobacco cessation premium discount program may be a good start, but it can leave employees with the view that the program is designed solely to reduce plan costs, without regard for the overall health of employees. On the other hand, rolling out complicated point systems and multiple hoops to jumps through can leave employees confused and less likely to participate. “Everything in moderation” is probably a good rule to follow when rolling out a wellness program.

A worthy goal for any organization is to create a culture of health, which does not happen overnight. It is a process that generally includes implementing methodically over a period of time a mixture of goal-based incentives with appropriate tools, resources and/or services to help participants achieve them. Examples of tools, resources and/or services include health screenings; flu shots; health risk assessments; educational materials such as newsletters; a support group or care management function; and other features. This approach surrounds employees with a support system and information to help the employee along the road to improved behaviors, while illustrating the company’s commitment to employee health, not just a lower health insurance bill.

3. Be serious about privacy.

Just about every day, another company announces a breach of personal information, many times that information is medical information. At the same time, particularly in a down economy, employees have concerns about whether decisions their employer makes about their employment will be based on their health condition. So, it is no wonder that employees will be reluctant to turn over their health information to an employer (or the employer’s vendor), even with attractive incentives to do so.

When implementing wellness programs, particularly those that require more input from employees, employers need to proactively address the privacy concerns of potential participants. Statements in program descriptions are not enough; confidence here is best built through action and example. Whether in connection with a wellness program or not, avoid communicating about sensitive issues relating to employee in hallways or around the water cooler, keep files locked and off your desk when not in use, don’t speak to spouses about the employee without the employee’s authorization, have written policies and procedures and training concerning privacy and data security. These and other steps will show the company is serious about employee privacy, and help to ease reluctance to wellness program participation.

4. Make your program materials clear.

Some wellness programs are very simple – if you use tobacco products, you will not qualify for the premium discount (unless the individual qualified for a reasonable alternative). However, many wellness programs can be more robust and, unfortunately, sometimes much more complicated. For example, some programs establish elaborate point-based systems for earning rewards . . . walk a mile get 5 points, read a health related magazine get 1 point, lose 15 pounds get 50 points. These kinds of programs can be difficult for employees to understand and/or time consuming to follow. Even if the program is not that difficult to follow, the explanation of it sometimes creates more confusion than the program itself.

Success here depends on really knowing your program, thinking it through all the way, and having others review it before rolling it out to potential participants. This step is critical because while the program may be clear in your mind, you need to understand how the words on the page (absent your deeper understanding of the program) will be understood by employees.

The communication strategy for the program, in terms of content, design and delivery, is critical. You need to reach all prospective participants and convey not only the program’s requirements, including the program’s rewards and how to achieve them, but the communication must also be convincing in terms of the program’s value proposition, and the company’s commitment to privacy and wellness.

5. Oh yes, compliance.

Last, but certainly not least, is that wellness programs, particularly those tied to group health plans, find themselves at the cross roads of many laws that workplace professionals know well. Examples include the HIPAA nondiscrimination rules, the ADA rules concerning medical inquiries and disability discrimination, the GINA limitations on the collection and use of genetic information (including family medical history), the ERISA requirements to describe plan benefits to participants, the Internal Revenue Code rules related to tax treatment of wellness rewards in different contexts, the Title VII/ADEA prohibitions on discrimination, the state law analogs to these including protections from “lifestyle discrimination.”

As we mentioned above, while the recently enacted health care reform law included language to increase the amount of the wellness incentives companies could provide, there are no express provisions in the new law to harmonize some potentially conflicting provisions in the laws noted above. For example, while the wellness provisions in the health care reform law (based principally on the HIPAA nondiscrimination regulations) will permit incentives of 30% and possibly 50% of health plan premiums, it remains unclear whether doing so would violate the “voluntariness” requirement under the ADA rules for making medical inquiries.

Currently there is very little guidance and only one pending case we are aware of that address wellness programs directly. In this environment, there certainly can be some legal and other risks to implementing a wellness program. However, there also are risks to doing nothing. Experienced counsel and thoughtful third-party vendors can be important members of a company’s team in developing a wellness program that is right for your organization, one that drives participation, creates the best opportunity for a healthier workforce and lower health-related costs, and minimizes applicable risks.