How to Handle Escalating Employee Health Costs

Posted by Jane Wang 

Employee benefits in the workplace are becoming increasingly costly for employers in North America. In the US, according to the 2015 Kaiser and HRET survey: The average premium for single coverage is $521 per month, or $6,251 per year. The average premium for family coverage is $1,462 per month or $17,545 per year. Based on the Conference Board of Canada’s latest benefits benchmarking report, the average cost of providing employee benefits is $8,330 per full-time employee. For the average company, this equates to spending approximately 10% of gross annual payroll.

Businesses are experiencing the reality of the aging workforce, and burden on their profitability from the continuously rising health premiums, cases of stress leave as well as increased absenteeism from their employee population. Year after year, CFOs continue to see increased business costs as the result of poor employee health and habits, but some are reluctant to revisit the funding and strategy of current health and wellness programs because most wellness programs cannot report ROI.

This is changing.  More data-driven and evidence-based wellness programs like Optimity are able to provide sound financial analysis for the reasons driving these changes in business costs, as a direct results of strategic wellness programs. A strong business case can now be made to invest in proactive health programs. The ROI can be realized quickly and certainly for these cost-effective, digital-first programs that support the employees in making smarter choices everyday, because it always leads to better health outcomes.

 

Innovative and employee-centric businesses who are changing their processes and opting into data-driven and evidence-based wellness programs, are benefiting both from a happy shift in culture (which helps their HR department recruit and retain talent easier), and are saving up to $6.50 for every $1 spent on wellness by implementing a sound cost-containment strategy that flattens the year over year cost increases of their employee benefits costs.

Unhealthy employees cost businesses more every year. According to Linda Lulli, Associate Vice President for Human Resources at Bryant University in Smithfield, R.I., an inactive person spends $1,500 extra on health costs per year. However, the costs go beyond the direct health spends, they also manifest themselves in the 9.3 days of absenteeism and 10% increase in drug claims. One in 6 U.S. adults reported taking a psychiatric drug, such as an antidepressant or a sedative, a new study found (read more). The goal of any wellness program is for employees to become healthier, and when they become healthier they end up spending less for doctors, hospitals and prescription drugs, says Paul Sollitto, Chief Financial Officer at EngagementHealth.

 

A recent study by Willis Towers Watson found that the primary driver for nearly half (44%) of companies with employee benefits is to control and improve their claims data to help with ongoing cost management. This is up from a quarter (24%) in last year’s study. Mark Cook, Director at Willis Towers Watson said, “There has been a clear evolution in the rationale for companies to include employee benefits in their cost management strategies. The initial motivation is often the simple desire to save money on the ever increasing cost of providing employee benefits.”

 

This is why digital based programs are becoming so popular. Digital based apps are scalable, sustainable, great personalized tools for working professionals to improve their quality of life. They are able to deliver content and able to coach behaviors to employees who work from home, on the road, and have different needs.

These digital-first wellness programs and apps when infused with evidence-based science and learn-action-test pathways have proven to positivey impact health outcomes and stabilize costs for employers. We simplify the process to start their personalized journeys: employees can easily download our health and wellness apps that not only provides a personal space for them to schedule and track their progress, but also has the ability to provide the critical data analysis that can help to tailor a more complex program.

 

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For more information on Optimity, evidence-based wellness strategies, or to schedule a demonstration, visit www.myoptimity.com

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About Optimity
We believes in 3 things: living well should be easy, energizing and fun; small actions can go a long way in leading you to success; and a culture of health is imperative to highly productive teams.

Working with physicians, trainers, nutritionists, and researchers, Optimity mindfully connects you with your habits on day to day making it fun to engage in self-improvement and self-actualization regularly. Optimity has created a way to make choosing a healthier way of life at the office and on the go both effortless and rewarding, by providing our users with personalized daily health challenges.

Our mobile apps are THE wellness-optimizing tool working to turn office potatoes into corporate athletes. To find out more about Optimity solutions, visit: www.myoptimity.com/our-solution

Employers Turn to Workplace Wellness to Help Reduce Health Care Costs

Posted by Trista Chan

Employees are the assets of any organization, and to sustain these assets and benefit from their long term service, it’s vital to maintain their wellbeing. With the increase in awareness around living a healthy lifestyle, many employers now offer workplace wellness programs to their employees. These programs help in reducing healthcare costs and providing long term benefits to employees and their families. These programs also provide knowledge on eating a healthy diet, the benefits of a healthy lifestyle, regular exercise and leading a happy and healthy life.

According to the reports of the Society for Human Resource Management, more than 70% of employers offer wellness programs to their employees, which is almost a 10-15% increase compared to previous years.

It’s expected that everyone, during some stage of their life will face some sort of health issue, whether it be due to an unhealthy diet, sleep deprivation, alcohol, or hereditary causes.  So by utilising the benefits from wellness programs employees can make positive changes in their health and overall productivity by reducing absenteeism, stress and increasing their performance and efficiency.
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So, why do employers offer wellness programs to employees?

Employers understand the fact that a healthy employee will fetch far better outcomes than an unhealthy employee. A wellness program can offer regular health checks of employees and their families, guide them on health risks and how to prevent them, provide regular medication and provide information on the importance of exercising. When an organization emphasizes how important it is that their employees are a part of the wellness program, the employees become more aware about leading a healthy life by following healthy habits.  This can also have a domino effect on the employees’ work lives. By providing your employees with a robust wellness program, you enable them to get more out of their life and become a happier person at work, which leads to more enjoyment at work, and better results for the company.

How do wellness programs help employers reduce healthcare cost?

Wellness programs help employees identify any health risks they have and provide information on how to live a healthy life. Participating in a wellness program can help in reducing an organization’s healthcare costs due to a decrease in absenteeism, reduction in medical claims, reduction in employee stress, boosted performance and increased social interaction with family and friends. When the employees are satisfied with their health and life in general, they are more likely to put in maximum efforts at work.

Basic services that are offered under a general wellness program includes stress management, obesity reduction, healthy diet plans, blood pressure checks, cholesterol level checks, fitness guides, time management sessions etc.  Although the initial outlay of implementing a wellness program can sometimes be costly, the overall healthcare costs are reduced significantly for both employers and employees.  For example, clients of Optimity see an ROI of $1.80 to $6.93 back for every $1 spent on wellness.

 

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Trista Chan is a Wellness Strategy Advisor at Optimity.  She leverages her education in nutrition and experience in corpoate health to guide organizations in building healthy, engaged employees.  Her “me-time” activities include yoga, reading health blogs, cooking….did she mention she likes wellness?  Her passion for all things health-related shines through in both her work and personal life.  

To learn more about how you can implement a strategic program to improve employee health outcomes and optimize work culture, contact me at tchan@myoptimity.com for a free consult.  I’ll be happy to support your organization in its wellness journey.

 

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Get the Most from Your Corporate HRA Programs

If you need to maximise the ROI from your corporate healthcare program, then it’s wise to adopt a step by step approach. Before anything else, an extensive and complete Health Risk Appraisal/ Assessment of your organization is an absolute must for any such program to be successful.

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 What an HRA must include?

 If you need to maximise the ROI from your corporate healthcare program, then it’s wise to adopt a step by step approach. Before anything else, an extensive and complete Health Risk Appraisal/ Assessment of your organization is an absolute must for any such program to be successful.

What an HRA must include?

Typically a HRA gives you a complete rundown about demographic characteristics, lifestyle information, personal and family medical history, height and weight, body composition analysis and blood pressure, sugar and cholesterol levels of your workforce. Specific and individual chronic conditions need to be elaborative.

 

What you must consider before designing and implementing an HRA program?

An effective HRA is one which maintains ethics, is technically sound and able to provide feedback and give space for follow ups. Providing incentives for participation and healthy mode of administration keeps the enthusiasm and eases the task. In every way, ROIs need to be calculated accurately before designing the final blueprint of the program.

What are the benefits of HRA?

HRAs give you comprehensive information about your workforce’s real age. For example, if your company have 60% of employees as obese and only 5% of are smokers, then fitness and diet programs need to have a larger focus. It also gives indications about what work or psychological conditions may be contributing to the problem.

 

How can HRAs go wrong?

If HRAs are not analysed properly, it can give you low or absolutely no ROI. HRAs can go wrong when you haven’t prepared your questionnaire properly (especially when assessing mental health related problems), by not maintaining ethics and secrecy, by making it a lengthy and time consuming process and by not explaining the process well or being unable to provide immediate, true and technical feedbacks.

 

Why you should create a momentum?

Studies show that 90% of employees say yes to the conduction of HRAs, but only 62% of them actually turn up. Most of them are disinterested and take corporate healthcare programs as an irrelevant process. Unless you are making it compulsory, corporate HRA programs need to be promoted, well explained and encouraged. You must explain how these programs can actually help each individual in maximizing their performance in both the workplace and in their personal life.

 

How you can ease the process of HRAs?

A recent study shows that more than 23% of respondents feel hesitant to open up to a corporate associated healthcare professional. However, if they are provided an online platform, they feel much more comfortable. Online HRA is also faster and the employer gets easy and immediate access to the contents and functionality. The more employees participate in the process, the better your data analysis and hence the more accurate your ROI calculations are.

 

What you must consider before designing and implementing an HRA program?

An effective HRA is one which maintains ethics, is technically sound and able to provide feedback and give space for follow ups. Providing incentives for participation and healthy mode of administration keeps the enthusiasm and eases the task. In every way, ROIs need to be calculated accurately before designing the final blueprint of the program.

 

What are the benefits of HRA?

HRAs give you comprehensive information about your workforce’s real age. For example, if your company have 60% of employees as obese and only 5% of are smokers, then fitness and diet programs need to have a larger focus. It also gives indications about what work or psychological conditions may be contributing to the problem.

 

How can HRAs go wrong?

If HRAs are not analysed properly, it can give you low or absolutely no ROI. HRAs can go wrong when you haven’t prepared your questionnaire properly (especially when assessing mental health related problems), by not maintaining ethics and secrecy, by making it a lengthy and time consuming process and by not explaining the process well or being unable to provide immediate, true and technical feedbacks.

 

Why you should create a momentum?

Studies show that 90% of employees say yes to the conduction of HRAs, but only 62% of them actually turn up. Most of them are disinterested and take corporate healthcare programs as an irrelevant process. Unless you are making it compulsory, corporate HRA programs need to be promoted, well explained and encouraged. You must explain how these programs can actually help each individual in maximizing their performance in both the workplace and in their personal life.

 

How you can ease the process of HRAs?

A recent study shows that more than 23% of respondents feel hesitant to open up to a corporate associated healthcare professional. However, if they are provided an online platform, they feel much more comfortable. Online HRA is also faster and the employer gets easy and immediate access to the contents and functionality. The more employees participate in the process, the better your data analysis and hence the more accurate your ROI calculations are.

 

 

Hilary is a Wellness Advisor at Optimity. She graduated from the University of Guelph with a B.Sc. in Human Kinetics. She aims to empower others to live their healthiest and happiest lives. Her interests are swimming, hiking and hanging out with friends and family. Wellness is a big part of her life and she hopes to make it a part of others.

 

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Understanding the Numbers Game – The Real ROI Story for Engagement and Wellness Programs

Posted by Jane Wang

Unhealthy and disengaged employees are costing North American businesses a whopping $1,100,000,000 per year. Smart organizations are looking to wellness and engagement programs to change their costs, with the average corporate wellness program averaging at $700 per year. But the average participation rates for these programs are below 30%: many organization have little to no tracking of metrics or ROI. This often has people questioning whether wellness programs actually deliver returns, but the real question you should be asking is what type of wellness programs can reduce claims and lower insurance premiums.

The answer is, programs that are tailored to target “at-risk” and “high-risk” employees and also those with >70% participation from all employees to prevent them from becoming disengaged and/or chronically ill.

 

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The most difficult factor in implementing a wellness program is employee participation. Participation penalties do not have a place in the workplace and incentives, while great, can’t force employees to make their lifestyle change alone. The key to a successful program is excellent leadership from the CEO and explanations as to why the wellness program exists and rising health care costs throughout the business.

 

According to a study done by the Gallup State of the American Workplace in 2012, employees that have an overall higher “well-being” have 41% lower health related costs, compared with employees who are struggling with their health, and 62% lower costs than employees who are suffering with their health.

 

Diabetes, depression, high blood pressure and being overweight are just a few factors that at-risk employees endure that can lead to expensive health claims. There are also the employees that are chronically ill and suffer from conditions such as cancer, heart conditions and advanced diabetes. Creating a disease management program for these employees can easily and effectively prevent your insurance premiums from rising. A program that pre-empts 20 unnecessary emergency department visits can easily save a business $50,000.

 

The science of wellness programs improving health is proven, but it is imperative that these programs are targeted at the right group of employees with the right programs with the right level of support and relevant content to ensure success.

 

The key is to engage in proactive health culture to support 100% of your employees, and allow highly data-driven specialist firms (such as Optimity) to use dynamic health risk assessments algorithms and smart targeting coaching programs to find the high-risk employees by engaging your employees in actively participating in their success. It is about building a culture of awareness and self-improvement to be able to achieve ROI.

 

Really and truly, any organization can do it. It is just about committing to change and getting the right experts on-board to help train and support you in understanding your own number and succeed in launching your proactive employee success practices.

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Sources

https://hbr.org/2016/04/meet-the-wellness-programs-that-save-companies-money

Do Workplace Wellness Programs Save Employers Money?,

2012 Gallup State of the American Workplace study,