A rather interesting article on Yahoo News caught my eye recently. It was titled "Coming to a Workplace Near You: Wellness or Else" and charges that companies make money on corporate wellness programs not through reduced healthcare costs but by dumping more of the cost on employees while at the same time reaping financial incentives from the government for deploying a wellness plan—tax write-offs of up to 30 percent of health insurance premiums, deductibles and other costs (more if it targets smoking).
Here's how it works, according to the article, originally published by Reuters.
For a self-insured company—and the article claims most big businesses do self-insure their medical programs—a wellness program costs between $100 and $300 annually per participant but returns only about $25 to $40 in reduced healthcare outlays according to a 2013 RAND study for Congress cited in the article. However, the penalty for non-participation in the wellness program for an employee is over $500 in increased premiums and reduced benefits, per a Kaiser Foundation survey.
Ergo, there is a financial incentive for companies to discourage employees from participating in the wellness program.
One way this is supposedly done is through intrusive questionnaires and health screenings that are required to sign up for the plan. There are also outcome-based wellness plans that require employees to meet draconian targets for weight loss, reduced cholesterol, etc., before getting their promised benefit cost reductions or avoiding financial penalties (hence the "Wellness or Else" reference in the headline).
How legitimate is this worry? Well, first of all, if a company is serious about promoting wellness rather than simply talking about it as a cheap feel-good stunt, it seems to me that outcome-based plans with realistic metrics are a reasonable approach. If the company is going to shell out for the incentives, it has a right to expect more than empty promises ("Sure I exercised today!"). Onsite dining programs that log healthful meal purchases at the company cafe as steps toward winning a wellness-based financial incentive are a good example of a reasonable trust-but-verify component of a results-based wellness program.
No doubt there are approaches that go over the line, demanding unreasonable outcomes or intruding on employee privacy. One survey cited in the article that required employees to answer questions such as "have you ever felt depressed" is not just beyond the pale but almost certainly illegal.
The article also fails to take into account benefits from wellness programs that go beyond the simple dollars and cents of healthcare cost outlays. But healthier employees are also by and large more productive and happier employees, and wellness programs that are done right can promote team spirit within an organization and foster the feeling that the company does care about its employees' well being. You can't necessarily measure that kind of stuff on the bottom line but it's there and companies that have it know it's there.
It's easy to be cynical, and undoubtedly there are examples out there of companies that play the wellness scam game to within inches of legality. But these are probably also companies with high turnover, low morale, abysmal productivity and hosts of hidden costs that dwarf whatever savings are accrued from the wellness chicanery.
Onsite dining is generally regarded as a major component of corporate wellness programs, and many of our readers in the corporate dining segment, as well as other segments, especially healthcare, now find themselves having to deal with wellness programs and developing ways to participate without alienating customers.
What are your feelings on this subject? Do you feel your organization legitimately wants its employees to be healthier and is willing to make outlays to encourage that by subsidizing healthier menu choices and offering incentives for healthier behaviors? Or is it smoke and mirrors designed either to get a PR boost or, as this the article I cited charges, actually a backhanded way of increasing the employee share of paying healthcare costs?