The option to self-fund employee health insurance is becoming very favorable for many of the US’ large employers. Seen as a way to avoid many of the healthcare reforms taxing provisions, self-funding can yield huge savings on employer-sponsored health plans. In fact, almost 60% of todays large employers choose to self-fund over traditional employer-sponsored options.
Choosing to self-fund also opens a variety of channels where even further savings can be achieved. One of these is the concept of implementing a corporate wellness program. A corporate wellness program does exactly as it sounds – it promotes wellness amongst a company’s employees to ensure maximum performance is achieved. Wellness programs often target specific goals towards creating a healthy corporate culture such as improving productivity, cutting absenteeism, and overall reducing medical costs.
As self-funding options become a more popular alternative to enrolling employees in the Health Insurance Exchange, many employers have begun utilizing the benefits of corporate wellness programs. The industry has skyrocketed to becoming a $6 billion dollar market. Today almost half of US employers with at least 50 employees implemented wellness programs, and almost 90% of employers with 50,000 employers or more have followed. Its growing popularity has stemmed from many employers seeking to avoid PPACA taxes and penalties. The PPACA will actually allow employers to reward wellness program participants – or penalize them – with discounts or penalties of up to 30% of their health insurance costs.
While wellness programs continue to grow in popularity, many employers are carefully observing and analyzing their true effect on healthcare costs and spending. A typical wellness program – comprised of two parts, disease management and lifestyle management – helps employees tackle challenges to their health that may effect their work. This includes everything from helping them quit smoking, managing their weight, arranging doctors visits and screenings for chronic illness, and even providing a personal trainer for gym sessions.
However, there remain a few barriers to achieving optimal results from your corporate wellness program. Many employers are finding wellness programs to be most effective when designed to suit the needs of your company and its employees. While broadly implemented wellness programs may be cheaper, maximized savings are often seen in programs specifically developed to target sub-sets of employees with specific illnesses or needs.
A recent RAND study of Pepsi Co.’s wellness program, “Healthy Living”, shed some light on the actual savings per dollar spent on a wellness program. The program has been criticized for being less effective than expected. However, by focusing on the individual components of the program – disease management & lifestyle management – it can be seen that the program did actually generate significant savings.
The disease management components produced healthcare savings of $136 per member per month, largely because of a reduction in hospital admissions. For each dollar spent on disease management, $3.78 was returned in savings. Participants in the lifestyle management component showed a small reduction in absenteeism, but generated no significant savings. For every dollar spent on lifestyle management only $0.48 was returned in savings. Throughout the 7-year study, the annual average savings generated by both components was $360 per participant and for every dollar spent $1.46 was returned.
As seen in with Pepsi Co.’s wellness program, the success of your corporate wellness program is determined by its design. Wellness programs may not be critical to a self-funding solutions success, but if implemented correctly they can yield even greater savings. Below are a series of tips that can help your company develop and implement a corporate wellness program regardless of if you choose to self-fund your employees’ health insurance or not.
Developing A Wellness Program
In developing your corporate wellness program, be sure to integrate as many corporate strategies and components where needed and ensure both your corporate structure and program share similar directions.
1. Senior Level Support
Before any steps are taken towards implementation, a corporate wellness program should gain the support from management. Management-level executives should value the benefits of the program towards its employees and the company itself. Linking your wellness program with business goals, values and strategic priorities will help increase improved employee productivity and savings.
2. Wellness Team
Structure a team that includes a cross-section of employees from all corporate levels to ensure your program is responsive to the needs of all its participants.
3. Data Collection
Gathering baseline data can help assess employee health interests and risks. Survey employee interests and conduct health risk assessments to identify areas to target throughout your program.
4. Operating Plan
Develop an operating plan that will outline your wellness program across the year and includes integration of company values. This will allow your company to measure specific short- and long-term goals and objectives. Try to incorporate as many corporate strategic initiatives as possible.
5. Health Initiatives
Health initiatives will work as the action items that uphold your wellness program. Choose certain health initiatives that meet the demands of your employees or solutions needed based on the baseline data and employee surveys. These should address the risk factors and health issues of your company’s employees.
6. A Supportive Culture
Provide employees with the support needed to facilitate your new health-driven culture. Creating a supportive environment with features that encourage and reward healthy choices will ensure your employees get involved.
7. Evaluate Your Outcomes
Once the plan is in place, determine how you will be able to measure your outcomes and compare them against the goals of the company and the employee.
While these steps may help point your company in the right direction when implementing a corporate wellness program, there remains space for innovation and flexibility. Not all wellness programs will target the same goals or share the same vision. Be sure to consult your employees, executives, and management staff when deciding how to properly implement your new corporate wellness program.
PayerFusion offers its clients the opportunity to self-fund their employer-sponsored health plans and promotes the implementation of an effective wellness program to all small and large employers. Contact one of our self-funding consultants to discuss the options available to you and your employees and start TRIMMING the costs.
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