Health Fairs

What began more than a decade ago as a pilot program in two locations, has now developed into a global initiative for Motorola. The business’s Employee Wellness is run by the Global Rewards group consisting of more than 50 employees and funded by an annual grant. Programs are consistently evaluated on their ability to deliver a positive return on investment and benefit the collective Motorola community. overall, the program reaches more than 30,000 employees, family members and retirees.

Employee Wellness  Features:

• The business provides free membership for active employees to Wellness Centers located at 8 United States locations (retirees pay a small fee).
• Workers at locations without a Wellness Center receive $240 to help cover the expense of a membership at a qualifying fitness center.
• In 2003, the business offered flu immunizations to more than 11,000 employees, dependents and retirees at 70 on-Site locations.
• Motorola holds hundreds of health education sessions each year for employees.

Employee Wellness  Solutions:

• Among employees who regularly used on-Site Motorola Wellness Centers or an alternate fitness center the business saved $3.93 for every $1 it invested, according to data from 2000.
• Participating employees cost $6.5 million dollars less in lifestyle-related healthcare expenses than non-participants.
• Employee Wellness participants experienced annual Health Care cost increases of 2.5 percent, compared to 18 percent increases for non-participants.

Obesity

Obesity, one of the fastest growing epidemics in America, is the most prevalent health risk among employees. Obese people are at more of a risk for several chronic diseases such as congestive heart failure, type 2 diabetes, stroke and hypertension.

Facts:

• The prevalence of overweight and obesity has doubled since 1980.
• Two-thirds (66.3 percent) of the population is overweight or obese (using Body Mass Index as a measure); 32.3 percent are corpulent.
• Obesity has roughly the same association with chronic health conditions as 20 years of aging.
• More than 20 percent of very overweight employees have low morale, almost twice that of employees of healthy weights.
• Overweight and Obesity healthcare claims cost around $92 billion in 2002, 9.1 percent of all United States Health Care expenditures.

Mental Illness

Often ignored or misdiagnosed, mental illness is one of the most disruptive health problems in corporations. It is unique in that its indirect costs (particularly presenteeism) are frequently higher than its direct health care costs.

Facts:

• Approximately 20 percent of the United States population is affected by mental illness during a given year, with the most common form being depression; yet in 1997, only 23 percent of American adults diagnosed with depression received treatment.
• In 2001 mental illness and substance abuse treatment cost more than $104 billion, comprising 7.6 percent of domestic Health Care spending.
• Around 217 million days of work are lost each year due to productivity decline from mental illness and substance abuse disorders, costing $17 billion each year.
• Depression is one of the most costly workplace health problems, costing the United States $43.7 billion each year, including workplace costs for absenteeism and lost productivity.

Smoking

Though smoking rates have declined slightly in the U.S. over the past 10 years, smokers still make up 21.1 percent of the population.  For many corporations, restrictions on smoking in buildings means a greater loss of work rate during breaks, adding to the costs of the practice.

Facts:

• The United States Center for Disease Control and Prevention (CDC) puts a $3,391 price tag on each employee who smokes: $1,760 in lost work rate and $1,623 in excess healthcare expenditures.
• Workers who smoke had about two times more lost production time (LPT) per week than employees who never smoked, a cost of $27 billion to corporations.
• An economic assessment found that a Health Care plan’s annual cost of covering treatment to help people quit smoking ranged from $0.89 to $4.92 per smoker, whereas the annual cost of treating tobacco-related disease ranged from $6 to $33 per smoker.
• The direct and indirect costs of smoking are estimated at $138 million per year.43 Finding Wealth Through Wellness 19 • Quitting smoking could lower an individual’s Health Care costs by $960 each year.
• Secondhand smoke costs the United States economy roughly $10 billion a year: $5 billion in estimated health care costs associated with secondhand smoke exposure, and another $4.6 billion in lost wages.
• From 1997-2001, tobacco use and exposure to tobacco smoke resulted in approximately 438,000 premature deaths in the U.S., 5.5 million years of life lost, and 92 billion dollars in productivity losses each year.
• Smokers, on average, miss 6.16 days of work per year due to sickness (including smoking related acute and chronic conditions), while nonsmokers miss 3.86 days of work per year.
• Each smoker who successfully quits declines the anticipated health care costs associated with heart attack and stroke by an estimated $47 in the first year and $853 during the following seven years.

Why Employee Wellness are the Solution to the Health Care Crisis

Growing Health Care costs show no signs of slowing in the near future. Hewitt projects Health Care costs will jump another 9.9 percent in 2006, amounting to more than $11,000 per family (of which the business will absorb more than 60 percent of costs).  More than nine of 10 members of management see increasing Health Care costs as a serious business concern that their business needs to address.26

The current Health Care climate represents an ideal opportunity for corporations to reevaluate their Employee Wellness  offerings and consider the more systemic approach of a robust Employee Wellness . Despite the sizable number of corporations that claim to offer disease management or Employee Wellness  activities, as of 2005 only 23 percent of employees were eligible for Employee Wellness  and only 13 percent were given access to a fitness center through work.27 This is despite evidence that nearly two-thirds of employees would be open to business-offered HRAs and enrolling in programs that encourage healthier lifestyles.28

Employee Wellness  are a chance for corporations to differentiate themselves from competitors by increasing work rate, cutting costs and establishing a healthier work environment that is valued by current and prospective employees. Nearly onethird of employees polled in a 2004 study by MetLife given benefi ts as an important reason why they decided to work for their business and 38 percent said it is among the top reasons they remain at their job.29 Gary Grates, global director of Edelman’s Change and Employee Program Engagement Group, notes, “The return on investment in a Employee Wellness  extends well beyond monetary Health Care savings. These programs can play a vital role in creating a more engaged workplace environment where employees are aligned with business objectives and goals. Employee Wellness  can represent more than a human resources initiative, they can be a bold symbol of what you as a business stand for.”

To date, corporations have viewed Employee Wellness as merely another benefit to be managed by the human resources department. However, executives, and their corporations, would be better served by adopting a more strategic and integrated approach to Employee Wellness . Companies that are able to develop Employee Wellness  based on sound assessment, work within existing regulations, and engage employees around initiatives, will reap significant rewards in terms of cost savings and long-term strength.

Following cost, poor employee engagement and inadequate talks and substructure are listed as the greatest challenges for corporations administering any health benefit program.

By law, corporations are required to explain any benefits or explicit conditions of employment to all employees – this is called “due process,” and it usually takes the form of a packet of information that new employees are asked to review and sign during orientation or, in the case of existing employees, a brief communication during open enrollment periods.

Companies that only participate in the minimally required due process communication of a Employee Wellness , however, do a disservice to the initiative and the business.

Opinions about Health Care in corporations represent one of the largest disconnects between management and employees. In discussing the need for savings, most corporations (70 percent) believe their business effectively communicates about rising Health Care costs, while only 34 percent of employees feel rising Health Care costs impact their business’ ability to succeed.23 When it comes to behaviors, 74 percent of corporations believe their employees should be held largely accountable for improving, managing and maintaining health, yet only 4 percent of corporations think that employees participate in these activities.

Under the proposed rules, the four specifications to be a bona fide Employee Wellness  are:

- The total reward that may be given to an individual is limited. The departments invited comments on the appropriate level of the reward, suggesting that a limit of 10 percent to 20 percent of the total expense of employee-only coverage may be appropriate.
- The program must be reasonably designed to promote great health or prevent disease for people in the program.
- The reward must be available to all similarly situated people. More specifically, the program must allow any individual for whom it is unreasonably diffi cult due to a healthcare condition to meet the Employee Wellness  standard (or for whom it is medically inadvisable to attempt to meet the Employee Wellness  standard) an opportunity to satisfy a reasonable alternative standard.
- All plan materials describing the terms of the program must disclose the availability of a reasonable alternative standard.
Source: United States Department of Labor Employee Benefits Security Administration

As Northwestern Memorial’s Kathryn Krivy says, “The most fundamental failure in any Employee Wellness  is not communicating. You need to tell people what you’re doing and why you’re doing it. You have to get employees engaged and train them of what’s going on.”

A properly started Employee Wellness is designed to save a business more money with improved participation. However, a business must match its focus on program design with an equally strategic investment in efforts to participate employees in the initiatives.

Lay out your case – Despite widespread recognition of rising Health Care costs, employees remain skeptical that the concern impacts business operations. In fact, only 53 percent of employees even believe what their business communicates about the subject.24 Companies need to be more candid and forthcoming about the amount they spend on Health Care and how that relates to larger budgetary constraints and potential investments.

Says Motorola’s Saenz: “We share with employees that we have been able to maintain Motorola’s Health Care spend trend below national average over the past decade due to their participation in our various Employee Wellness . This transparency is necessary to keep reminding people the reasons for our behaviors.”

An effective strategy is to focus on the cost savings and overall health benefi ts to the employee and not the business. By personalizing the information in this way, it establishes a win-win scenario instead of presenting the program as a sacrifi ce on the part of the employee. Information should be presented through multiple channels, constructed in a way that makes sense to all levels of employees, and given to employees, dependents and retirees.

Make it your own – Every Employee Wellness  will be different, and should reflect the culture of a business. While program areas will be determined by analyzing employee health risks, the actual offerings should be shaped by the nature of the business. Younger, more active employee communities may be attracted by different programs than an older or technicaloriented employee. In Addition, a global business with mobile employees will have different needs than a business with one central location.

As noted earlier regarding PepsiCo’s HealthRoads, one strategy is for corporations to brand their Employee Wellness . Union Pacifi c Railroad (HealthTracks), General Motors (LifeSteps) and Caterpillar (Healthy Balance) all adopted this approach to help create recognition and a larger meaning around their efforts. Having a branded initiative helps employees and other stakeholders see the larger objectives and goals of the Employee Wellness , instead of focusing on isolated offerings.

Say it loud, say it proud – As a potential cost-saving initiative, Employee Wellness  should be given the same executive substructure and internal commitment as any comparable business effort. Companies should not approach wellness as simply a preventive, financially-motivated program, but rather as an opportunity for the business to distinguish itself and become more competitive.

Jeffrey Treem, analyst, Edelman Change and Employee Program Engagement Group, says that effective communication about Employee Wellness  should be integrated into existing business communication channels and vehicles. “This comprises executive communication to external stakeholders,” he notes, “because this sends a powerful message back to employees about the priority of the programs. Employee Wellness  should not be treated as merely an additional employee perk, but rather a progressive and strategic effort to lower costs and create a healthier work environment.” Talk among yourselves – The most powerful champions of any Employee Wellness  will be the participants.

Companies should find ways to facilitate discussions about the program among employees. This could take the form of support groups, interactive media and the sharing of success stories.

However, since Employee Wellness touch on potentially private health problems, it is significant communication remains positive and inclusive, while not pressuring employees. Discussion of wellness problems should be voluntary, though corporations may consider providing incentives/rewards for those willing to contribute. Motivation and information from peers is likely to carry more credibility and significance than messages from management.

Even in an at-will employment environment, people are still guarded from discrimination (including wrongful termination) by virtue of belonging to a protected class. Before implementing a Employee Wellness , corporations need to be knowledgeable about the relevant legal restrictions and the potential impacts these measures can have on benefi ts and employee behavior programs.

Title VII of the Civil Rights Act of 1964 – Prohibits employment discrimination based on race, color, religion, sex or national origin.

This means that standards and offerings need to be applied equally (or possibly proportionally) to all protected classes. In other words, if a business is offering access to fitness centers, it should ensure that men and women have equal access to facilities. Companies should also consider whether a person who may live in areas heavily populated by one race, religion or ethnicity also have access to facilities and programs. The easiest way to address this concern is to support on-Site Employee Wellness whenever possible. This not only ensures equal access, but according to Northwestern Memorial’s Krivy, also boosts participation.

Companies must also be aware that particular health problems may disproportionately affect protected classes. Health Risk Assessments and any incentives/rewards put in place may must be customized to account for non-lifestyle related differences.

The Equal Pay Act of 1963 (EPA) – Protects men and women who perform substantially equal work in the same establishment from sex-based wage discrimination. Benefits, incentives/rewards and programs need to be applied equally to men and women. A business can’t set a weight goal for men and not for women, although a business can set health parameters by job function. The Age Discrimination in Employment Act of 1967 (ADEA) – Protects people who are 40 years of age or older from discrimination based on age.

Policies not only need to be available to people of all ages, but program objectives and goals, restrictions and incentives/rewards need to be designed with age appropriateness. While older employees (or retirees and dependents) may inherently pose a higher health risk, their behaviors should be evaluated in terms of demographically appropriate measures.

Title I and Title V of the American citizens with Disabilities Act of 1990 (ADA) – Prohibits employment discrimination against qualified people with disabilities in the private sector, and in state and local governments. Similar to other workplace offerings, any Employee Wellness , such as a fitness center or health clinic, would have to make reasonable accommodations for employees with disabilities.

One area of equivocation is whether corpulent employees qualify as disabled. The concern is complicated because weight is caused by several factors (genetics, environment, behavior), some of which may be out of the employee’s control. Generally, for employees to qualify for disability based on weight, the condition must signifi cantly impair their physical or mental ability to perform their job. This determination would need to be made by a qualifi ed physician. Although this label may affect the types of incentives/rewards and program requirements provided, it likely would not affect the overall implementation of behavioral-focused initiatives.

Civil Rights Act of 1991 – Provides monetary damages in cases of intentional employment discrimination.

This legislation permits people to sue corporations for improper treatment. Compensation can be in the form of actual damages such as lost or expected wages, compensatory damages for a circumstance that causes public embarrassment, or even punitive damages meant to send a message to a business for egregious or habitual violations.

While these laws govern all business activities, there are even more stringent restrictions with regard to Health Care problems. Most policies, communications and data collection regarding employee health are governed by the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Under HIPAA corporations can’t deny eligibility for benefits or charge a higher premium on the basis of:

• Health status
• Health condition (including both physical and mental illnesses)
• Claims experience
• Receipt of health care
• Health history
• Genetic information
• Evidence of insurability (comprises activities such as riding a motorcycle, skiing, snowmobiling and other similar pursuits)
• Disability

However, because wellness programs may not include healthcare treatment or be insurance related, and may instead be confined to behavioral initiatives, HIPAA’s nondiscrimination provisions do not completely apply. To address this, in 2001 the United States Department of Labor, the Internal Revenue Service and the United States Department of Health and Human Services jointly issued a proposed regulation to help clarify the lawful provisions of a “bona fi de Wellness Program” in the context of HIPAA’s existing language (See Box p. 14). Although the regulation is not yet final, corporations that comply with the measure will be viewed by the government as making a good-faith effort to avert discrimination in wellness programs.

Comprehensive Employee Wellness  are still relatively new to corporate America and the legal implications of implementation and enforcement are not completely known. By their very nature, these programs potentially expose corporations to discrimination lawsuits, disengaged employees and detrimental public relations. However, corporations that make a good-faith effort to comply with current Health Care-related laws, find ways to engage employees, and communicate strategically, will be able to minimize these risks while finding plenty of room to develop a creative and effective Employee Wellness .

For many corporations, a smoking ban would not even apply to all employees. That is because currently 30 states and the District of Columbia prevent corporations from banning off-duty smoking.21 In Addition, 13 states prevent corporations from banning alcohol use away from work. Only six states have broad statutes that prevent corporations from prohibiting any lawful behavior. Michigan is the only state that expressly prohibits discrimination on the basis of weight, however the cities of San Francisco and Santa Cruz, Calif., also have this provision (San Francisco makes exceptions for police offi cers, fi refi ghters and the San Francisco 49ers football team). When starting Employee Wellness , corporations should keep in mind local statutes as well as established common law.

Savings of Voluntary Employee Wellness  = (number of participants x savings per participant) – (expense of program)
Savings of Incentive-based Employee Wellness  = (number of participants x savings per participant) – (expense of program + expense of incentives/rewards)
Savings of Mandatory Employee Wellness = (number of participants x savings per participant) – (expense of program + expense of policy-related turnover + expense of limited talent pool)

Constructing Employee Wellness  policies in a business that employs unionized employees can pose unique challenges. Employee Wellness  may be perceived by some unions as a condition of employment and therefore would be subject to collective bargaining between the parties. However this circumstance can represent an opportunity for both groups, as a policy agreed upon between union leadership and management is likely to be received more favorably by employees. The United Auto Workers and General Motors worked together to create and position a joint Employee Wellness which has successfully reached more than 800,000 participants. (See Case Studies, UAWGeneral Motors LifeSteps Employee Wellness , p.21).

Unless specifically stated otherwise, most business-employee relationships in the U.S. are governed by the principle of at-will employment. Under this system a business, or the employee, can terminate the relationship without any required showing of cause. This at-will standard gives private corporations large authority in governing the behavior of employees. In this environment, corporations can Finding Wealth Through Wellness 10 creatively design Employee Wellness  based upon their specifi c corporate culture. Employee Wellness generally take three main forms:

Voluntary Employee Wellness  – The most popular form of employee Employee Wellness , in most cases they are made available to employees but participation (or lack thereof) is not linked to any type of consequence. Due to ineffective communication, frequently employees are either unaware of these offerings or confuse them with insurance-based medical care. Incentive-based – Employee Wellness based on incentives reward employees for participation in Employee Wellness  activities. Incentives usually comprise decreased Health Care premiums, fitness center membership or customized support offerings. In these programs, employees’ behavior can be linked to a particular reward.

Mandatory Employee Wellness – Some corporations require, or ban, certain health-related behaviors. These can take the form of mandatory Health Risk Assessments for employees and restrictions on smoking or alcohol use. While mandating behavior is an effective method to eliminate high-risk behavior, the cost savings must be measured against the potential message sent to existing and prospective employees. Given that employees are already under various levels of scrutiny in the workplace, individuals may resist attempts by corporations to regulate off-duty behaviors. In Addition, some employees may fi nd it diffi cult to comply, forcing corporations into the uncomfortable circumstance of punishing an otherwise advantageous employee.

In the short-term a mandate-based Employee Wellness  can drive to an increase in turnover, as employees either choose to leave or are fi red for noncompliance. In the long-term, the policy may prevent the business from hiring an otherwise qualifi ed applicant, or may serve as a deterrent for individuals thinking of the business. Limits in recruiting, for instance, led CNN to rescind a 13-year ban on hiring smokers.18

Companies need to make sure that Employee Wellness  are aligned with the values and culture that drive business operations. If a business emphasizes trust and individual responsibility, then a mandate-based program will likely cause more dissension than it would in a business that already heavily regulates business behaviors. Moreover, a work environment with a sizable disengaged population will likely have poor participation in a voluntarybased program. When calculating cost savings, corporations need to take a wider view and consider the effects on long-term employee engagement.

In 2005, Michigan-based insurance benefits provider Weyco instituted a smoking ban for all of its nearly 200 employees. Workers are subject to random testing and if they fail a mandatory breathalyzer test, they will be fi red. It is believed that Weyco is the first business to use testing to enforce a smoking ban – most corporations ask employees to self-report behavior. Four employees (more than 2 percent of the total workforce) left Weyco as a result of the policy. A year prior to the ban the business started a $50 smoking fee, which would be waived if a employee passed a nicotine test or agreed to take a smokingcessation class. Weyco’s president Howard Weyers published that 20 employees quit smoking through this program.20 Workers were told they had one year before the total ban would go into effect. Under the new Employee Wellness , Weyco does offer $35 a month for employees who want to use a fi tness center and another $65 a month for employees who meet fitness objectives and goals.

1. Undertake a utilization assessment – While corporations can’t obtain health information on individual employees, insurance providers will supply corporations with reports that detail patterns and rates of employee use for things such as physician visits, hospital stays and prescription use. This information is vital for a business to set a benchmark of its current health risk status. Data from human resources can be integrated with benefits information to support a complete picture of employees’ health-related costs. Then, corporations can determine the specific level of behavior modification necessary to result in cost savings. The utilization assessment helps a business identify the areas in which it should focus its Employee Wellness to reap the greatest benefits.

2. Build a business case – Once a utilization assessment is in place, corporations are able to quantify the Health Care cost savings that will result from specific levels of lifestyle modification and risk reduction. This can be done by setting objectives and goals in terms of reductions in identifi able insurance utilization, attendance or disability variables, or by aiming for reductions in health risks and projecting the associated cost savings. Effective estimates factor in the expense of the Employee Wellness  as well as the necessary internal marketing efforts that will surround the program. Says Betty-Jo Saenz, United States Health Care Strategy lead for Motorola, “When we started our programs, our focus was on the 20 percent of employees that made up 80 percent of the costs. We’ve addressed that, and now we’re paying attention to those who are active and Finding Wealth Through Wellness 8 keeping them healthy. Wherever you are on the continuum, there are opportunities.”

3. Create a cross-functional wellness group – Companies need to identify potential group members who can be champions of wellness within the business. It is significant that the group is representative of the demographic and functional diversity of employees so that it can credibly address any specific needs groups may have. This group will serve as the voice and face for the Employee Wellness  within the business. Best practice corporations integrate members from human resources, communications, business development and management. Using the utilization analysis as a model, the wellness group should evaluate what programs would be most effective within each particular corporate culture, aligning health-risk priorities with initiatives that employees will be receptive to.

4. Build buy-in from management – The most effective Employee Wellness  have substructure from the highest levels of a business. Substructure from management, both in words and in action, sends the message that Employee Wellness  are a priority for a business. The utilization analysis can be a powerful tool to build the business case for Employee Wellness  and convince executives that initiatives are worthy of investment and attention. Meaningful wellness-related messages are integrated into business talks and aligned with corporate objectives.

5. Create a all-inclusive Employee Program Engagement plan – The most brilliantly conceived Employee Wellness  is meaningless if no employees participate. Effective wellness talks emphasize both health and monetary benefits at the personal and business level. According to a 2004 survey by Towers Perrin, only 28 percent of employees say their business communicates about Health Care problems other than cost. In addition, wellness-related information should be a part of existing business talks efforts and not coupled solely with benefits talks. This helps elevate the priority of Employee Wellness  and align initiatives with business objectives.

Additionally, talks around Employee Wellness  can share personal success stories and support business progress updates. Successful corporations not only use existing communications channels to generate discussion around activities, but also consider more interactive tools like message boards, forums, blogs and wikis. This helps personalize initiatives and permits for the sharing of best practices within the business.

Many corporations engage healthcare experts to advise in the construction, communication and substructure of the program. The use of outside authorities such as these will expand the credibility of the Employee Wellness  as well as combat skepticism from employees who may view the business’s motives as merely selfserving.

Another strategy available to corporations is to brand their Employee Wellness . This move can expand the visibility and acceptance of the offering. Branded wellness programs are most common when corporations are also promoting an external campaign around Employee Wellness . An example of this is PepsiCo, which launched its HealthRoads Employee Wellness  internally along with a consumer campaign, Smart Spot, that puts special labels on healthier food and drink options.

These efforts are more effective when they are not owned solely by the internal communications department, but rather when managers serve as leaders of, as well as participate in, Employee Wellness  within corporations. This establishes more immediate accountability and motivation.

6. Measure constantly and consistently – At every step of implementation, a Employee Wellness  must be able to corroborate its value to a business. Employee Wellness  should be designed to allow corporations to set benchmarks and evaluate behavior modification. Measurement ought to consider not only quantitative health measures, but also qualitative measures of stress and employee engagement. Less than 10 percent of corporations do extensive management of health care expense, employee health risk status or employee satisfaction with benefit offerings, and less than half of corporations do any assessment in these areas at all.16

Measurement is only useful if a business explicitly interprets what data would constitute success. Potential measures of success comprise:

• Participation rates
• Better employee engagement
• Lowering of risk status
• Lowering of direct health costs
• Reduced absenteeism
• Reduced disability claims

Motorola’s Saenz advises administrators of Employee Wellness  to track as many measures as possible from the start, even if management only requires one, because it is very difficult to retrieve data later. She notes that even if leadership begins by looking at participation rates, they will eventually want to know about reductions in claims and costs.

Frequent assessment is the only way to build substructure among management and employees. Nearly half of corporations feel a lack of useful data is a top barrier to their ability to manage employee health, and at least 20 percent of corporations do not know how effective existing Employee Wellness  are regarding various outcomes. Companies should administer utilization analyses each year and reevaluate Employee Wellness  priorities based upon changes. In Addition, progress should be shared with the wider business community to build substructure for initiatives. Managers and executives throughout a business are likely to substructure a program that can prove increased work rate among employees. Effective Employee Wellness  are designed to be fl exible so they can respond to changes in both business objectives and goals and larger health variations.

Employee Wellness first became popular during the economic boom of the late 1980s and early 90s. Programs featured on-Site fitness centers and massages, and were used as recruitment tools for young employees searching for nontraditional work environments. However, when the tech bubble burst, so too did the willingness to spend money on perceived perks, and corporations returned to a more old-school benefit structure focused on managed medical care.

In recent years, as Health Care costs have spiraled out of control, corporations have explored the potential of Employee Wellness  as a cost-saving strategy. Companies such as Johnson and Johnson, General Motors, Motorola and Union Pacifi c Railroad have all seen a signifi cant return on investments in employee health (See Case Studies, p.20). Employee Wellness  can help reduce the costs associated with:

Health Care premiums – The expense a business pays for medical insurance: According to a 2005 study by Hewitt, the Health Care expense per employee in the United States in 2006 will average $8,046, with corporations absorbing nearly two-thirds of that expense.

Pharmaceutical costs – The price of a prescription plan: According to a 2005 study by Mercer, the average annual prescription costs for sizable corporations grew 11.5 percent, making it nearly a decade straight of double-digit increases in cost.

Short-term disability (STD) – The cost of offering STD insurance to employees: According to a 2004 study by insurance provider Cigna, the average STD claim results in $13,094 in direct disability payments and health care costs. The report also found that 26 percent of claims related to healthcare events were a result of chronic conditions that could likely be mediated through Employee Wellness , and that these cases amount for 56 percent of the STD-related health care costs.

Absenteeism — The cost of missed work: Absenteeism cost corporations $660 per employee in 2004, with nearly one-third of corporations characterizing the trend as a serious concern.

Presenteeism — The cost associated with employees who work at decreased work rate levels: Sixty percent of the total cost of employee illnesses come from presenteeism, according to a 2004 study by the Institute for Health and Productivity Studies at Cornell University.

The evidence is clear that strategically designed Employee Wellness  can reduce both direct and indirect Health Care costs. A 2004 review of Employee Wellness  revealed that, in total, an investment of $1 by a business in Wellness Programming returned a median cost savings of $2.05 to $4.64.

Employee Program Engagement is the level at which employees are aligned with and working toward business objectives and goals. Employee Program Engagement is influenced by a wide range of factors that include internal talks, business structure, benefits and recognition.

Companies that have high levels of employee engagement benefit from improved work rate, retention and execution than peers with disengaged employees.  Levels of engagement among employees in the U.S. have been declining over the past decade as individuals have become disillusioned with the treatment of employees by corporations. The inability to engage employees is one of the reasons why, despite steady increases in hours worked, America lags behind several other nations in terms of employee productivity per hours worked.

Employee Wellness  may increase employee engagement in several ways. First, when communicated properly, they corroborate to employees that the business cares about their wellness. This can improve retention and turnover as well as support more of a discretionary effort from employees. During a period of significant downsizing, Motorola found more of an interest in its Employee Wellness  as managers recognized the value of providing for the health and wellness of employees.

In addition, the health improvements will cut down on absenteeism and presenteeism (when employees continue to work despite decreased work rate), allowing for more time invested at full work rate. Lastly, healthier employees are more likely to have increased morale, which translates into a more enjoyable and more effective work environment.